Correlation Between American High and Blackrock
Can any of the company-specific risk be diversified away by investing in both American High and Blackrock 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 American High and Blackrock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American High Income and Blackrock Hi Yld, you can compare the effects of market volatilities on American High and Blackrock 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 American High with a short position of Blackrock. Check out your portfolio center. Please also check ongoing floating volatility patterns of American High and Blackrock.
Diversification Opportunities for American High and Blackrock
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between American and Blackrock is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding American High Income and Blackrock Hi Yld in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Hi Yld and American High 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 American High Income are associated (or correlated) with Blackrock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock Hi Yld has no effect on the direction of American High i.e., American High and Blackrock go up and down completely randomly.
Pair Corralation between American High and Blackrock
Assuming the 90 days horizon American High is expected to generate 1.14 times less return on investment than Blackrock. But when comparing it to its historical volatility, American High Income is 1.09 times less risky than Blackrock. It trades about 0.22 of its potential returns per unit of risk. Blackrock Hi Yld is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 715.00 in Blackrock Hi Yld on September 2, 2024 and sell it today you would earn a total of 5.00 from holding Blackrock Hi Yld or generate 0.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
American High Income vs. Blackrock Hi Yld
Performance |
| Timeline |
| American High Income |
| Blackrock Hi Yld |
American High and Blackrock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American High and Blackrock
The main advantage of trading using opposite American High and Blackrock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American High position performs unexpectedly, Blackrock 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 will offset losses from the drop in Blackrock's long position.| American High vs. Touchstone Premium Yield | American High vs. Calamos Dynamic Convertible | American High vs. Ft 7934 Corporate | American High vs. Ms Global Fixed |
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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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