Correlation Between BlackRock Credit and Dow Jones
Can any of the company-specific risk be diversified away by investing in both BlackRock Credit and Dow Jones 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 Credit and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BlackRock Credit Allocation and Dow Jones Industrial, you can compare the effects of market volatilities on BlackRock Credit and Dow Jones 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 Credit with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of BlackRock Credit and Dow Jones.
Diversification Opportunities for BlackRock Credit and Dow Jones
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between BlackRock and Dow is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding BlackRock Credit Allocation and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial and BlackRock Credit 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 Credit Allocation are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of BlackRock Credit i.e., BlackRock Credit and Dow Jones go up and down completely randomly.
Pair Corralation between BlackRock Credit and Dow Jones
Considering the 90-day investment horizon BlackRock Credit is expected to generate 2.89 times less return on investment than Dow Jones. But when comparing it to its historical volatility, BlackRock Credit Allocation is 1.44 times less risky than Dow Jones. It trades about 0.13 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 4,238,757 in Dow Jones Industrial on August 28, 2024 and sell it today you would earn a total of 247,274 from holding Dow Jones Industrial or generate 5.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BlackRock Credit Allocation vs. Dow Jones Industrial
Performance |
| Timeline |
BlackRock Credit and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
BlackRock Credit Allocation
Pair trading matchups for BlackRock Credit
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with BlackRock Credit and Dow Jones
The main advantage of trading using opposite BlackRock Credit and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BlackRock Credit position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| BlackRock Credit vs. Pimco Corporate Income | BlackRock Credit vs. Pimco Income Strategy | BlackRock Credit vs. Pcm Fund | BlackRock Credit vs. Pimco High Income |
| Dow Jones vs. CECO Environmental Corp | Dow Jones vs. Western Acquisition Ventures | Dow Jones vs. Tyson Foods | Dow Jones vs. Inflection Point Acquisition |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges |