Correlation Between Blackrock Enhanced and China Everbright
Can any of the company-specific risk be diversified away by investing in both Blackrock Enhanced and China Everbright 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 Enhanced and China Everbright into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Blackrock Enhanced Equity and China Everbright Limited, you can compare the effects of market volatilities on Blackrock Enhanced and China Everbright 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 Enhanced with a short position of China Everbright. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackrock Enhanced and China Everbright.
Diversification Opportunities for Blackrock Enhanced and China Everbright
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Blackrock and China is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Blackrock Enhanced Equity and China Everbright Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Everbright and Blackrock Enhanced 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 Enhanced Equity are associated (or correlated) with China Everbright. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Everbright has no effect on the direction of Blackrock Enhanced i.e., Blackrock Enhanced and China Everbright go up and down completely randomly.
Pair Corralation between Blackrock Enhanced and China Everbright
Considering the 90-day investment horizon Blackrock Enhanced is expected to generate 2.33 times less return on investment than China Everbright. But when comparing it to its historical volatility, Blackrock Enhanced Equity is 5.48 times less risky than China Everbright. It trades about 0.13 of its potential returns per unit of risk. China Everbright Limited is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 54.00 in China Everbright Limited on September 5, 2024 and sell it today you would earn a total of 14.00 from holding China Everbright Limited or generate 25.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 59.27% |
| Values | Daily Returns |
Blackrock Enhanced Equity vs. China Everbright Limited
Performance |
| Timeline |
| Blackrock Enhanced Equity |
| China Everbright |
Blackrock Enhanced and China Everbright Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Blackrock Enhanced and China Everbright
The main advantage of trading using opposite Blackrock Enhanced and China Everbright positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blackrock Enhanced position performs unexpectedly, China Everbright 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 China Everbright will offset losses from the drop in China Everbright's long position.| Blackrock Enhanced vs. Eaton Vance Risk | Blackrock Enhanced vs. Eaton Vance Tax | Blackrock Enhanced vs. Eaton Vance Limited | Blackrock Enhanced vs. Blackrock Muniholdings Closed |
| China Everbright vs. Blackrock International Growth | China Everbright vs. Blackrock Enhanced Equity | China Everbright vs. Eaton Vance Tax | China Everbright vs. Blackrock Resources Commodities |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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