Correlation Between BlackRock Latin and FIRST TRUST
Can any of the company-specific risk be diversified away by investing in both BlackRock Latin and FIRST TRUST 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 FIRST TRUST 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 FIRST TRUST GLOBAL, you can compare the effects of market volatilities on BlackRock Latin and FIRST TRUST 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 FIRST TRUST. Check out your portfolio center. Please also check ongoing floating volatility patterns of BlackRock Latin and FIRST TRUST.
Diversification Opportunities for BlackRock Latin and FIRST TRUST
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BlackRock and FIRST is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding BlackRock Latin American and FIRST TRUST GLOBAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FIRST TRUST GLOBAL 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 FIRST TRUST. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FIRST TRUST GLOBAL has no effect on the direction of BlackRock Latin i.e., BlackRock Latin and FIRST TRUST go up and down completely randomly.
Pair Corralation between BlackRock Latin and FIRST TRUST
Assuming the 90 days trading horizon BlackRock Latin American is expected to under-perform the FIRST TRUST. But the etf apears to be less risky and, when comparing its historical volatility, BlackRock Latin American is 77.19 times less risky than FIRST TRUST. The etf trades about -0.02 of its potential returns per unit of risk. The FIRST TRUST GLOBAL is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 2,708 in FIRST TRUST GLOBAL on November 7, 2024 and sell it today you would earn a total of 249,442 from holding FIRST TRUST GLOBAL or generate 9211.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 61.77% |
| Values | Daily Returns |
BlackRock Latin American vs. FIRST TRUST GLOBAL
Performance |
| Timeline |
| BlackRock Latin American |
| FIRST TRUST GLOBAL |
BlackRock Latin and FIRST TRUST Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BlackRock Latin and FIRST TRUST
The main advantage of trading using opposite BlackRock Latin and FIRST TRUST positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BlackRock Latin position performs unexpectedly, FIRST TRUST 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 FIRST TRUST will offset losses from the drop in FIRST TRUST'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 |
| FIRST TRUST vs. Scottish Mortgage Investment | FIRST TRUST vs. VinaCapital Vietnam Opportunity | FIRST TRUST vs. Edinburgh Worldwide Investment | FIRST TRUST vs. Baillie Gifford Growth |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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