Correlation Between Blackrock Enhanced and Helios Fairfax
Can any of the company-specific risk be diversified away by investing in both Blackrock Enhanced and Helios Fairfax 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 Helios Fairfax 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 Helios Fairfax Partners, you can compare the effects of market volatilities on Blackrock Enhanced and Helios Fairfax 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 Helios Fairfax. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackrock Enhanced and Helios Fairfax.
Diversification Opportunities for Blackrock Enhanced and Helios Fairfax
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Blackrock and Helios is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Blackrock Enhanced Equity and Helios Fairfax Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Helios Fairfax Partners 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 Helios Fairfax. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Helios Fairfax Partners has no effect on the direction of Blackrock Enhanced i.e., Blackrock Enhanced and Helios Fairfax go up and down completely randomly.
Pair Corralation between Blackrock Enhanced and Helios Fairfax
Considering the 90-day investment horizon Blackrock Enhanced is expected to generate 1.26 times less return on investment than Helios Fairfax. But when comparing it to its historical volatility, Blackrock Enhanced Equity is 3.98 times less risky than Helios Fairfax. It trades about 0.04 of its potential returns per unit of risk. Helios Fairfax Partners is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 284.00 in Helios Fairfax Partners on September 4, 2024 and sell it today you would lose (12.00) from holding Helios Fairfax Partners or give up 4.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Blackrock Enhanced Equity vs. Helios Fairfax Partners
Performance |
| Timeline |
| Blackrock Enhanced Equity |
| Helios Fairfax Partners |
Blackrock Enhanced and Helios Fairfax Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Blackrock Enhanced and Helios Fairfax
The main advantage of trading using opposite Blackrock Enhanced and Helios Fairfax positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blackrock Enhanced position performs unexpectedly, Helios Fairfax 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 Helios Fairfax will offset losses from the drop in Helios Fairfax's long position.| Blackrock Enhanced vs. Eaton Vance Tax Managed | Blackrock Enhanced vs. Eaton Vance Risk | Blackrock Enhanced vs. Eaton Vance Tax | Blackrock Enhanced vs. Eaton Vance Limited |
| Helios Fairfax vs. Western Asset High | Helios Fairfax vs. SWK Holdings Corp | Helios Fairfax vs. Onex Corp | Helios Fairfax vs. P10 Inc |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Other Complementary Tools
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities |