Correlation Between Capital World and Blackrock World
Can any of the company-specific risk be diversified away by investing in both Capital World and Blackrock World 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 Capital World and Blackrock World into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capital World Bond and Blackrock World Income, you can compare the effects of market volatilities on Capital World and Blackrock World 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 Capital World with a short position of Blackrock World. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capital World and Blackrock World.
Diversification Opportunities for Capital World and Blackrock World
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Capital and Blackrock is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Capital World Bond and Blackrock World Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock World Income and Capital 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 Capital World Bond are associated (or correlated) with Blackrock World. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock World Income has no effect on the direction of Capital World i.e., Capital World and Blackrock World go up and down completely randomly.
Pair Corralation between Capital World and Blackrock World
Assuming the 90 days horizon Capital World Bond is expected to generate 1.37 times more return on investment than Blackrock World. However, Capital World is 1.37 times more volatile than Blackrock World Income. It trades about 0.05 of its potential returns per unit of risk. Blackrock World Income is currently generating about 0.06 per unit of risk. If you would invest 1,597 in Capital World Bond on September 2, 2024 and sell it today you would earn a total of 7.00 from holding Capital World Bond or generate 0.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Capital World Bond vs. Blackrock World Income
Performance |
| Timeline |
| Capital World Bond |
| Blackrock World Income |
Capital World and Blackrock World Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capital World and Blackrock World
The main advantage of trading using opposite Capital World and Blackrock World positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capital World position performs unexpectedly, Blackrock World 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 Blackrock World will offset losses from the drop in Blackrock World's long position.| Capital World vs. Saat Moderate Strategy | Capital World vs. Franklin Lifesmart Retirement | Capital World vs. Wisdomtree Siegel Moderate | Capital World vs. Franklin Lifesmart Retirement |
| Blackrock World vs. Blackrock California Municipal | Blackrock World vs. Blackrock Balanced Capital | Blackrock World vs. Blackrock Eurofund Class | Blackrock World vs. Blackrock Funds |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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