Correlation Between Transamerica Emerging and Blackrock Government

Can any of the company-specific risk be diversified away by investing in both Transamerica Emerging and Blackrock Government at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Transamerica Emerging and Blackrock Government into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Transamerica Emerging Markets and Blackrock Government Bond, you can compare the effects of market volatilities on Transamerica Emerging and Blackrock Government and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Transamerica Emerging with a short position of Blackrock Government. Check out your portfolio center. Please also check ongoing floating volatility patterns of Transamerica Emerging and Blackrock Government.

Diversification Opportunities for Transamerica Emerging and Blackrock Government

-0.29

Correlation Coefficient

Transamerica Emerging  Blackrock Government

Very good diversification

The 3 months correlation between Transamerica and Blackrock is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Transamerica Emerging Markets and Blackrock Government Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Government Bond and Transamerica Emerging is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Transamerica Emerging Markets are associated (or correlated) with Blackrock Government. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock Government Bond has no effect on the direction of Transamerica Emerging i.e., Transamerica Emerging and Blackrock Government go up and down completely randomly.

Pair Corralation between Transamerica Emerging and Blackrock Government

If you would invest  789.00  in Transamerica Emerging Markets on October 3, 2024 and sell it today you would earn a total of  4.00  from holding Transamerica Emerging Markets or generate 0.51% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	1.19%
Values	Daily Returns

Transamerica Emerging Markets  vs.  Blackrock Government Bond

Transamerica Emerging

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Transamerica Emerging Markets has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's forward-looking indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Blackrock Government Bond

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Blackrock Government Bond has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental drivers, Blackrock Government is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Transamerica Emerging and Blackrock Government

The main advantage of trading using opposite Transamerica Emerging and Blackrock Government positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Transamerica Emerging position performs unexpectedly, Blackrock Government can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Blackrock Government will offset losses from the drop in Blackrock Government's long position.

The idea behind Transamerica Emerging Markets and Blackrock Government Bond pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Bonds Directory module to find actively traded corporate debentures issued by US companies.