Correlation Between BlackRock Capital and Western Asset
Can any of the company-specific risk be diversified away by investing in both BlackRock Capital and Western Asset 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 BlackRock Capital and Western Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BlackRock Capital Allocation and Western Asset High, you can compare the effects of market volatilities on BlackRock Capital and Western Asset 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 BlackRock Capital with a short position of Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of BlackRock Capital and Western Asset.
Diversification Opportunities for BlackRock Capital and Western Asset
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BlackRock and Western is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding BlackRock Capital Allocation and Western Asset High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset High and BlackRock Capital 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 BlackRock Capital Allocation are associated (or correlated) with Western Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Asset High has no effect on the direction of BlackRock Capital i.e., BlackRock Capital and Western Asset go up and down completely randomly.
Pair Corralation between BlackRock Capital and Western Asset
Given the investment horizon of 90 days BlackRock Capital Allocation is expected to generate 0.83 times more return on investment than Western Asset. However, BlackRock Capital Allocation is 1.2 times less risky than Western Asset. It trades about 0.09 of its potential returns per unit of risk. Western Asset High is currently generating about 0.02 per unit of risk. If you would invest 1,109 in BlackRock Capital Allocation on August 27, 2024 and sell it today you would earn a total of 502.00 from holding BlackRock Capital Allocation or generate 45.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BlackRock Capital Allocation vs. Western Asset High
Performance |
| Timeline |
| BlackRock Capital |
| Western Asset High |
BlackRock Capital and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BlackRock Capital and Western Asset
The main advantage of trading using opposite BlackRock Capital and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BlackRock Capital position performs unexpectedly, Western Asset 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 Western Asset will offset losses from the drop in Western Asset's long position.| BlackRock Capital vs. BlackRock Health Sciences | BlackRock Capital vs. BlackRock Science and | BlackRock Capital vs. Neuberger Berman Next | BlackRock Capital vs. Virtus Allianzgi Artificial |
| Western Asset vs. Pimco Dynamic Income | Western Asset vs. Pimco Corporate Income | Western Asset vs. Cornerstone Strategic Value | Western Asset vs. Cornerstone Strategic Return |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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