Correlation Between BlackRock Health and IHIT
Can any of the company-specific risk be diversified away by investing in both BlackRock Health and IHIT 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 Health and IHIT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BlackRock Health Sciences and IHIT, you can compare the effects of market volatilities on BlackRock Health and IHIT 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 Health with a short position of IHIT. Check out your portfolio center. Please also check ongoing floating volatility patterns of BlackRock Health and IHIT.
Diversification Opportunities for BlackRock Health and IHIT
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between BlackRock and IHIT is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding BlackRock Health Sciences and IHIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IHIT and BlackRock Health 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 Health Sciences are associated (or correlated) with IHIT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IHIT has no effect on the direction of BlackRock Health i.e., BlackRock Health and IHIT go up and down completely randomly.
Pair Corralation between BlackRock Health and IHIT
Given the investment horizon of 90 days BlackRock Health Sciences is expected to generate 1.67 times more return on investment than IHIT. However, BlackRock Health is 1.67 times more volatile than IHIT. It trades about 0.04 of its potential returns per unit of risk. IHIT is currently generating about -0.08 per unit of risk. If you would invest 1,322 in BlackRock Health Sciences on August 26, 2024 and sell it today you would earn a total of 204.00 from holding BlackRock Health Sciences or generate 15.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 31.79% |
| Values | Daily Returns |
BlackRock Health Sciences vs. IHIT
Performance |
| Timeline |
| BlackRock Health Sciences |
| IHIT |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
BlackRock Health and IHIT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BlackRock Health and IHIT
The main advantage of trading using opposite BlackRock Health and IHIT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BlackRock Health position performs unexpectedly, IHIT 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 IHIT will offset losses from the drop in IHIT's long position.| BlackRock Health vs. BlackRock Science Tech | BlackRock Health vs. Blackrock Innovation Growth | BlackRock Health vs. Virtus Allianzgi Artificial | BlackRock Health vs. Highland Floating Rate |
| IHIT vs. MFS Investment Grade | IHIT vs. Eaton Vance National | IHIT vs. Invesco High Income | IHIT vs. Nuveen California Select |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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