Correlation Between BlackRock Latin and LEGAL GENERAL
Can any of the company-specific risk be diversified away by investing in both BlackRock Latin and LEGAL GENERAL 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 Latin and LEGAL GENERAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BlackRock Latin American and LEGAL GENERAL UCITS, you can compare the effects of market volatilities on BlackRock Latin and LEGAL GENERAL 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 Latin with a short position of LEGAL GENERAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of BlackRock Latin and LEGAL GENERAL.
Diversification Opportunities for BlackRock Latin and LEGAL GENERAL
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between BlackRock and LEGAL is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding BlackRock Latin American and LEGAL GENERAL UCITS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LEGAL GENERAL UCITS and BlackRock Latin 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 Latin American are associated (or correlated) with LEGAL GENERAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LEGAL GENERAL UCITS has no effect on the direction of BlackRock Latin i.e., BlackRock Latin and LEGAL GENERAL go up and down completely randomly.
Pair Corralation between BlackRock Latin and LEGAL GENERAL
Assuming the 90 days trading horizon BlackRock Latin American is expected to generate 1.32 times more return on investment than LEGAL GENERAL. However, BlackRock Latin is 1.32 times more volatile than LEGAL GENERAL UCITS. It trades about 0.05 of its potential returns per unit of risk. LEGAL GENERAL UCITS is currently generating about 0.01 per unit of risk. If you would invest 30,600 in BlackRock Latin American on November 29, 2024 and sell it today you would earn a total of 400.00 from holding BlackRock Latin American or generate 1.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BlackRock Latin American vs. LEGAL GENERAL UCITS
Performance |
| Timeline |
| BlackRock Latin American |
| LEGAL GENERAL UCITS |
BlackRock Latin and LEGAL GENERAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BlackRock Latin and LEGAL GENERAL
The main advantage of trading using opposite BlackRock Latin and LEGAL GENERAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BlackRock Latin position performs unexpectedly, LEGAL GENERAL 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 LEGAL GENERAL will offset losses from the drop in LEGAL GENERAL's long position.| BlackRock Latin vs. Edinburgh Worldwide Investment | BlackRock Latin vs. VinaCapital Vietnam Opportunity | BlackRock Latin vs. iShares MSCI Japan | BlackRock Latin vs. Amundi EUR High |
| LEGAL GENERAL vs. LEGAL GENERAL UCITS | LEGAL GENERAL vs. LEGAL GENERAL UCITS | LEGAL GENERAL vs. LEGAL GENERAL UCITS | LEGAL GENERAL vs. LEGAL GENERAL UCITS |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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