Correlation Between Bain Capital and BlackRock Capital
Can any of the company-specific risk be diversified away by investing in both Bain Capital and BlackRock Capital 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 Bain Capital and BlackRock Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bain Capital Specialty and BlackRock Capital Allocation, you can compare the effects of market volatilities on Bain Capital and BlackRock Capital 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 Bain Capital with a short position of BlackRock Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bain Capital and BlackRock Capital.
Diversification Opportunities for Bain Capital and BlackRock Capital
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bain and BlackRock is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Bain Capital Specialty and BlackRock Capital Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BlackRock Capital and Bain 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 Bain Capital Specialty are associated (or correlated) with BlackRock Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BlackRock Capital has no effect on the direction of Bain Capital i.e., Bain Capital and BlackRock Capital go up and down completely randomly.
Pair Corralation between Bain Capital and BlackRock Capital
Given the investment horizon of 90 days Bain Capital Specialty is expected to generate 1.34 times more return on investment than BlackRock Capital. However, Bain Capital is 1.34 times more volatile than BlackRock Capital Allocation. It trades about 0.09 of its potential returns per unit of risk. BlackRock Capital Allocation is currently generating about 0.09 per unit of risk. If you would invest 1,033 in Bain Capital Specialty on August 28, 2024 and sell it today you would earn a total of 648.00 from holding Bain Capital Specialty or generate 62.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bain Capital Specialty vs. BlackRock Capital Allocation
Performance |
| Timeline |
| Bain Capital Specialty |
| BlackRock Capital |
Bain Capital and BlackRock Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bain Capital and BlackRock Capital
The main advantage of trading using opposite Bain Capital and BlackRock Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bain Capital position performs unexpectedly, BlackRock Capital 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 Capital will offset losses from the drop in BlackRock Capital's long position.| Bain Capital vs. BlackRock TCP Capital | Bain Capital vs. Triplepoint Venture Growth | Bain Capital vs. Sixth Street Specialty | Bain Capital vs. Golub Capital BDC |
| BlackRock Capital vs. Doubleline Yield Opportunities | BlackRock Capital vs. PIMCO Access Income | BlackRock Capital vs. Blackrock Innovation Growth | BlackRock Capital vs. Cohen Steers Tax Advantaged |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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