Correlation Between Blackrock Inflation and Inflation-protected
Can any of the company-specific risk be diversified away by investing in both Blackrock Inflation and Inflation-protected 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 Inflation-protected 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 Inflation Protected Bond Fund, you can compare the effects of market volatilities on Blackrock Inflation and Inflation-protected 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 Inflation-protected. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackrock Inflation and Inflation-protected.
Diversification Opportunities for Blackrock Inflation and Inflation-protected
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Blackrock and Inflation-protected is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Blackrock Inflation Protected and Inflation Protected Bond Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inflation Protected 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 Inflation-protected. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inflation Protected has no effect on the direction of Blackrock Inflation i.e., Blackrock Inflation and Inflation-protected go up and down completely randomly.
Pair Corralation between Blackrock Inflation and Inflation-protected
Assuming the 90 days horizon Blackrock Inflation is expected to generate 2.38 times less return on investment than Inflation-protected. But when comparing it to its historical volatility, Blackrock Inflation Protected is 1.2 times less risky than Inflation-protected. It trades about 0.03 of its potential returns per unit of risk. Inflation Protected Bond Fund is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 914.00 in Inflation Protected Bond Fund on October 27, 2024 and sell it today you would earn a total of 119.00 from holding Inflation Protected Bond Fund or generate 13.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Blackrock Inflation Protected vs. Inflation Protected Bond Fund
Performance |
| Timeline |
| Blackrock Inflation |
| Inflation Protected |
Blackrock Inflation and Inflation-protected Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Blackrock Inflation and Inflation-protected
The main advantage of trading using opposite Blackrock Inflation and Inflation-protected positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blackrock Inflation position performs unexpectedly, Inflation-protected 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 Inflation-protected will offset losses from the drop in Inflation-protected's long position.| Blackrock Inflation vs. Vy T Rowe | Blackrock Inflation vs. Wells Fargo Diversified | Blackrock Inflation vs. Allianzgi Diversified Income | Blackrock Inflation vs. Schwab Small Cap Index |
| Inflation-protected vs. Jpmorgan Diversified Fund | Inflation-protected vs. Tax Managed Mid Small | Inflation-protected vs. Madison Diversified Income | Inflation-protected vs. Wells Fargo Diversified |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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