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
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between BlackRock and FIRST is -0.8. 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. In addition to that, BlackRock Latin is 1.35 times more volatile than FIRST TRUST GLOBAL. It trades about -0.01 of its total potential returns per unit of risk. FIRST TRUST GLOBAL is currently generating about 0.04 per unit of volatility. If you would invest 204,975 in FIRST TRUST GLOBAL on September 20, 2024 and sell it today you would earn a total of 27,975 from holding FIRST TRUST GLOBAL or generate 13.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 72.34% |
| 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. Aberdeen New India | BlackRock Latin vs. VinaCapital Vietnam Opportunity | BlackRock Latin vs. Downing Strategic Micro Cap | BlackRock Latin vs. CT Private Equity |
| FIRST TRUST vs. Edinburgh Worldwide Investment | FIRST TRUST vs. BlackRock Latin American | FIRST TRUST vs. Coor Service Management | FIRST TRUST vs. Franklin FTSE Brazil |
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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