Correlation Between XAI Octagon and Blackrock International

Can any of the company-specific risk be diversified away by investing in both XAI Octagon and Blackrock International 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 XAI Octagon and Blackrock International into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between XAI Octagon Floating and Blackrock International Growth, you can compare the effects of market volatilities on XAI Octagon and Blackrock International 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 XAI Octagon with a short position of Blackrock International. Check out your portfolio center. Please also check ongoing floating volatility patterns of XAI Octagon and Blackrock International.

Diversification Opportunities for XAI Octagon and Blackrock International

-0.74

Correlation Coefficient

XAI Octagon  Blackrock International

Pay attention - limited upside

The 3 months correlation between XAI and Blackrock is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding XAI Octagon Floating and Blackrock International Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock International and XAI Octagon 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 XAI Octagon Floating are associated (or correlated) with Blackrock International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock International has no effect on the direction of XAI Octagon i.e., XAI Octagon and Blackrock International go up and down completely randomly.

Pair Corralation between XAI Octagon and Blackrock International

Given the investment horizon of 90 days XAI Octagon Floating is expected to under-perform the Blackrock International. But the stock apears to be less risky and, when comparing its historical volatility, XAI Octagon Floating is 1.28 times less risky than Blackrock International. The stock trades about -0.15 of its potential returns per unit of risk. The Blackrock International Growth is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  518.00  in Blackrock International Growth on December 28, 2024 and sell it today you would earn a total of  44.00  from holding Blackrock International Growth or generate 8.49% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

XAI Octagon Floating  vs.  Blackrock International Growth

XAI Octagon Floating

Risk-Adjusted Performance

Very Weak

Over the last 90 days XAI Octagon Floating has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's essential indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Blackrock International

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Blackrock International Growth are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly sluggish technical and fundamental indicators, Blackrock International may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with XAI Octagon and Blackrock International

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

The idea behind XAI Octagon Floating and Blackrock International Growth 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.

Check out your portfolio center.

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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.