Correlation Between Bats Series and Blackrock Global
Can any of the company-specific risk be diversified away by investing in both Bats Series and Blackrock Global 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 Bats Series and Blackrock Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bats Series M and Blackrock Global Lng, you can compare the effects of market volatilities on Bats Series and Blackrock Global 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 Bats Series with a short position of Blackrock Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bats Series and Blackrock Global.
Diversification Opportunities for Bats Series and Blackrock Global
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bats and Blackrock is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Bats Series M and Blackrock Global Lng in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Global Lng and Bats Series 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 Bats Series M are associated (or correlated) with Blackrock Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock Global Lng has no effect on the direction of Bats Series i.e., Bats Series and Blackrock Global go up and down completely randomly.
Pair Corralation between Bats Series and Blackrock Global
Assuming the 90 days horizon Bats Series is expected to generate 1.24 times less return on investment than Blackrock Global. But when comparing it to its historical volatility, Bats Series M is 1.42 times less risky than Blackrock Global. It trades about 0.1 of its potential returns per unit of risk. Blackrock Global Lng is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,208 in Blackrock Global Lng on August 31, 2024 and sell it today you would earn a total of 65.00 from holding Blackrock Global Lng or generate 5.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
Bats Series M vs. Blackrock Global Lng
Performance |
| Timeline |
| Bats Series M |
| Blackrock Global Lng |
Bats Series and Blackrock Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bats Series and Blackrock Global
The main advantage of trading using opposite Bats Series and Blackrock Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bats Series position performs unexpectedly, Blackrock Global 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 Blackrock Global will offset losses from the drop in Blackrock Global's long position.| Bats Series vs. Icon Information Technology | Bats Series vs. Biotechnology Fund Class | Bats Series vs. Science Technology Fund | Bats Series vs. Allianzgi Technology Fund |
| Blackrock Global vs. World Energy Fund | Blackrock Global vs. Energy Basic Materials | Blackrock Global vs. Franklin Natural Resources | Blackrock Global vs. Hennessy Bp Energy |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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