Correlation Between Blackrock and Touchstone Arbitrage
Can any of the company-specific risk be diversified away by investing in both Blackrock and Touchstone Arbitrage 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 and Touchstone Arbitrage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Blackrock Hi Yld and Touchstone Arbitrage Fund, you can compare the effects of market volatilities on Blackrock and Touchstone Arbitrage 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 with a short position of Touchstone Arbitrage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackrock and Touchstone Arbitrage.
Diversification Opportunities for Blackrock and Touchstone Arbitrage
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Blackrock and Touchstone is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Blackrock Hi Yld and Touchstone Arbitrage Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Touchstone Arbitrage and Blackrock 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 Hi Yld are associated (or correlated) with Touchstone Arbitrage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Touchstone Arbitrage has no effect on the direction of Blackrock i.e., Blackrock and Touchstone Arbitrage go up and down completely randomly.
Pair Corralation between Blackrock and Touchstone Arbitrage
Assuming the 90 days horizon Blackrock Hi Yld is expected to generate 0.62 times more return on investment than Touchstone Arbitrage. However, Blackrock Hi Yld is 1.61 times less risky than Touchstone Arbitrage. It trades about 0.29 of its potential returns per unit of risk. Touchstone Arbitrage Fund is currently generating about 0.17 per unit of risk. If you would invest 716.00 in Blackrock Hi Yld on September 4, 2024 and sell it today you would earn a total of 5.00 from holding Blackrock Hi Yld or generate 0.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.24% |
| Values | Daily Returns |
Blackrock Hi Yld vs. Touchstone Arbitrage Fund
Performance |
| Timeline |
| Blackrock Hi Yld |
| Touchstone Arbitrage |
Blackrock and Touchstone Arbitrage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Blackrock and Touchstone Arbitrage
The main advantage of trading using opposite Blackrock and Touchstone Arbitrage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blackrock position performs unexpectedly, Touchstone Arbitrage 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 Touchstone Arbitrage will offset losses from the drop in Touchstone Arbitrage's long position.| Blackrock vs. Limited Term Tax | Blackrock vs. Victory High Income | Blackrock vs. Cs 607 Tax | Blackrock vs. Transamerica Funds |
| Touchstone Arbitrage vs. Davis Financial Fund | Touchstone Arbitrage vs. Transamerica Financial Life | Touchstone Arbitrage vs. Angel Oak Financial | Touchstone Arbitrage vs. Royce Global Financial |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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