Correlation Between Blackrock Inflation and The Bond
Can any of the company-specific risk be diversified away by investing in both Blackrock Inflation and The Bond 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 Inflation and The Bond into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Blackrock Inflation Protected and The Bond Fund, you can compare the effects of market volatilities on Blackrock Inflation and The Bond 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 Inflation with a short position of The Bond. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackrock Inflation and The Bond.
Diversification Opportunities for Blackrock Inflation and The Bond
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Blackrock and The is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Blackrock Inflation Protected and The Bond Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bond Fund and Blackrock Inflation 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 Inflation Protected are associated (or correlated) with The Bond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bond Fund has no effect on the direction of Blackrock Inflation i.e., Blackrock Inflation and The Bond go up and down completely randomly.
Pair Corralation between Blackrock Inflation and The Bond
Assuming the 90 days horizon Blackrock Inflation is expected to generate 1.13 times less return on investment than The Bond. But when comparing it to its historical volatility, Blackrock Inflation Protected is 1.19 times less risky than The Bond. It trades about 0.11 of its potential returns per unit of risk. The Bond Fund is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,710 in The Bond Fund on August 28, 2024 and sell it today you would earn a total of 76.00 from holding The Bond Fund or generate 4.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Blackrock Inflation Protected vs. The Bond Fund
Performance |
| Timeline |
| Blackrock Inflation |
| Bond Fund |
Blackrock Inflation and The Bond Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Blackrock Inflation and The Bond
The main advantage of trading using opposite Blackrock Inflation and The Bond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blackrock Inflation position performs unexpectedly, The Bond 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 The Bond will offset losses from the drop in The Bond's long position.| Blackrock Inflation vs. John Hancock Government | Blackrock Inflation vs. Us Government Securities | Blackrock Inflation vs. Vanguard Short Term Government | Blackrock Inflation vs. Inverse Government Long |
| The Bond vs. The Midcap Growth | The Bond vs. The Growth Fund | The Bond vs. The Missouri Tax Free | The Bond vs. The National Tax Free |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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