Correlation Between Blackrock Enhanced and Wendel
Can any of the company-specific risk be diversified away by investing in both Blackrock Enhanced and Wendel 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 Wendel 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 Wendel, you can compare the effects of market volatilities on Blackrock Enhanced and Wendel 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 Wendel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackrock Enhanced and Wendel.
Diversification Opportunities for Blackrock Enhanced and Wendel
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Blackrock and Wendel is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Blackrock Enhanced Equity and Wendel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wendel 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 Wendel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wendel has no effect on the direction of Blackrock Enhanced i.e., Blackrock Enhanced and Wendel go up and down completely randomly.
Pair Corralation between Blackrock Enhanced and Wendel
Considering the 90-day investment horizon Blackrock Enhanced is expected to generate 1.0 times less return on investment than Wendel. But when comparing it to its historical volatility, Blackrock Enhanced Equity is 2.95 times less risky than Wendel. It trades about 0.04 of its potential returns per unit of risk. Wendel is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 9,345 in Wendel on September 4, 2024 and sell it today you would earn a total of 186.00 from holding Wendel or generate 1.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 63.84% |
| Values | Daily Returns |
Blackrock Enhanced Equity vs. Wendel
Performance |
| Timeline |
| Blackrock Enhanced Equity |
| Wendel |
Blackrock Enhanced and Wendel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Blackrock Enhanced and Wendel
The main advantage of trading using opposite Blackrock Enhanced and Wendel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blackrock Enhanced position performs unexpectedly, Wendel 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 Wendel will offset losses from the drop in Wendel'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 |
| Wendel vs. Blackrock International Growth | Wendel vs. Blackrock Enhanced Equity | Wendel vs. Eaton Vance Tax | Wendel 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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