Correlation Between BlackRock Future and Global X
Can any of the company-specific risk be diversified away by investing in both BlackRock Future and Global X 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 Future and Global X into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BlackRock Future Health and Global X Renewable, you can compare the effects of market volatilities on BlackRock Future and Global X 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 Future with a short position of Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of BlackRock Future and Global X.
Diversification Opportunities for BlackRock Future and Global X
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between BlackRock and Global is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding BlackRock Future Health and Global X Renewable in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Renewable and BlackRock Future 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 Future Health are associated (or correlated) with Global X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global X Renewable has no effect on the direction of BlackRock Future i.e., BlackRock Future and Global X go up and down completely randomly.
Pair Corralation between BlackRock Future and Global X
Given the investment horizon of 90 days BlackRock Future Health is expected to generate 0.76 times more return on investment than Global X. However, BlackRock Future Health is 1.32 times less risky than Global X. It trades about 0.03 of its potential returns per unit of risk. Global X Renewable is currently generating about -0.19 per unit of risk. If you would invest 2,578 in BlackRock Future Health on August 29, 2024 and sell it today you would earn a total of 15.00 from holding BlackRock Future Health or generate 0.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BlackRock Future Health vs. Global X Renewable
Performance |
| Timeline |
| BlackRock Future Health |
| Global X Renewable |
BlackRock Future and Global X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BlackRock Future and Global X
The main advantage of trading using opposite BlackRock Future and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BlackRock Future position performs unexpectedly, Global X 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 Global X will offset losses from the drop in Global X's long position.The idea behind BlackRock Future Health and Global X Renewable pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Global X vs. Global X CleanTech | Global X vs. Global X Clean | Global X vs. Global X Wind | Global X vs. Global X Thematic |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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