Correlation Between BlackRock and IShares Trust
Can any of the company-specific risk be diversified away by investing in both BlackRock and IShares Trust 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 IShares Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BlackRock and iShares Trust , you can compare the effects of market volatilities on BlackRock and IShares Trust 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 IShares Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of BlackRock and IShares Trust.
Diversification Opportunities for BlackRock and IShares Trust
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BlackRock and IShares is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding BlackRock and iShares Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Trust 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 are associated (or correlated) with IShares Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Trust has no effect on the direction of BlackRock i.e., BlackRock and IShares Trust go up and down completely randomly.
Pair Corralation between BlackRock and IShares Trust
Assuming the 90 days trading horizon BlackRock is expected to generate 0.65 times more return on investment than IShares Trust. However, BlackRock is 1.54 times less risky than IShares Trust. It trades about 0.19 of its potential returns per unit of risk. iShares Trust is currently generating about 0.01 per unit of risk. If you would invest 1,989,000 in BlackRock on August 31, 2024 and sell it today you would earn a total of 118,000 from holding BlackRock or generate 5.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BlackRock vs. iShares Trust
Performance |
| Timeline |
| BlackRock |
| iShares Trust |
BlackRock and IShares Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BlackRock and IShares Trust
The main advantage of trading using opposite BlackRock and IShares Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BlackRock position performs unexpectedly, IShares Trust 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 IShares Trust will offset losses from the drop in IShares Trust's long position.| BlackRock vs. DXC Technology | BlackRock vs. Prudential Financial | BlackRock vs. CVS Health | BlackRock vs. Ross Stores |
| IShares Trust vs. iShares Trust | IShares Trust vs. iShares Trust | IShares Trust vs. iShares Trust | IShares Trust vs. iShares Trust |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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