Correlation Between Verizon Communications and BlackRock ETF

Can any of the company-specific risk be diversified away by investing in both Verizon Communications and BlackRock ETF 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 Verizon Communications and BlackRock ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Verizon Communications and BlackRock ETF Trust, you can compare the effects of market volatilities on Verizon Communications and BlackRock ETF 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 Verizon Communications with a short position of BlackRock ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Verizon Communications and BlackRock ETF.

Diversification Opportunities for Verizon Communications and BlackRock ETF

-0.31

Correlation Coefficient

Verizon Communications  BlackRock ETF

Very good diversification

The 3 months correlation between Verizon and BlackRock is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Verizon Communications and BlackRock ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BlackRock ETF Trust and Verizon Communications 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 Verizon Communications are associated (or correlated) with BlackRock ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BlackRock ETF Trust has no effect on the direction of Verizon Communications i.e., Verizon Communications and BlackRock ETF go up and down completely randomly.

Pair Corralation between Verizon Communications and BlackRock ETF

If you would invest  3,312  in BlackRock ETF Trust on October 12, 2024 and sell it today you would earn a total of  0.00  from holding BlackRock ETF Trust or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	5.0%
Values	Daily Returns

Verizon Communications  vs.  BlackRock ETF Trust

Verizon Communications

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Verizon Communications has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

BlackRock ETF Trust

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BlackRock ETF Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical indicators, BlackRock ETF is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Verizon Communications and BlackRock ETF

The main advantage of trading using opposite Verizon Communications and BlackRock ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Verizon Communications position performs unexpectedly, BlackRock ETF 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 ETF will offset losses from the drop in BlackRock ETF's long position.

The idea behind Verizon Communications and BlackRock ETF Trust 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.