Correlation Between Blackrock World and Fannie Mae
Can any of the company-specific risk be diversified away by investing in both Blackrock World and Fannie Mae 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 World and Fannie Mae into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Blackrock World Mining and Fannie Mae, you can compare the effects of market volatilities on Blackrock World and Fannie Mae 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 World with a short position of Fannie Mae. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackrock World and Fannie Mae.
Diversification Opportunities for Blackrock World and Fannie Mae
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Blackrock and Fannie is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Blackrock World Mining and Fannie Mae in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fannie Mae and Blackrock World 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 World Mining are associated (or correlated) with Fannie Mae. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fannie Mae has no effect on the direction of Blackrock World i.e., Blackrock World and Fannie Mae go up and down completely randomly.
Pair Corralation between Blackrock World and Fannie Mae
Assuming the 90 days trading horizon Blackrock World Mining is expected to under-perform the Fannie Mae. But the stock apears to be less risky and, when comparing its historical volatility, Blackrock World Mining is 9.71 times less risky than Fannie Mae. The stock trades about -0.11 of its potential returns per unit of risk. The Fannie Mae is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 350.00 in Fannie Mae on October 26, 2024 and sell it today you would earn a total of 311.00 from holding Fannie Mae or generate 88.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 87.8% |
| Values | Daily Returns |
Blackrock World Mining vs. Fannie Mae
Performance |
| Timeline |
| Blackrock World Mining |
| Fannie Mae |
Blackrock World and Fannie Mae Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Blackrock World and Fannie Mae
The main advantage of trading using opposite Blackrock World and Fannie Mae positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blackrock World position performs unexpectedly, Fannie Mae 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 Fannie Mae will offset losses from the drop in Fannie Mae's long position.| Blackrock World vs. Premier Foods PLC | Blackrock World vs. Ecclesiastical Insurance Office | Blackrock World vs. Molson Coors Beverage | Blackrock World vs. Martin Marietta Materials |
| Fannie Mae vs. Canadian General Investments | Fannie Mae vs. JPMorgan Japanese Investment | Fannie Mae vs. Empire Metals Limited | Fannie Mae vs. Blackrock World Mining |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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