Correlation Between China Everbright and Blackrock International
Can any of the company-specific risk be diversified away by investing in both China Everbright and Blackrock International 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 China Everbright and Blackrock International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Everbright Limited and Blackrock International Growth, you can compare the effects of market volatilities on China Everbright and Blackrock International 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 China Everbright with a short position of Blackrock International. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Everbright and Blackrock International.
Diversification Opportunities for China Everbright and Blackrock International
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between China and Blackrock is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding China Everbright Limited and Blackrock International Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock International and China Everbright 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 China Everbright Limited are associated (or correlated) with Blackrock International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock International has no effect on the direction of China Everbright i.e., China Everbright and Blackrock International go up and down completely randomly.
Pair Corralation between China Everbright and Blackrock International
Assuming the 90 days horizon China Everbright Limited is expected to generate 4.28 times more return on investment than Blackrock International. However, China Everbright is 4.28 times more volatile than Blackrock International Growth. It trades about 0.13 of its potential returns per unit of risk. Blackrock International Growth is currently generating about -0.01 per unit of risk. If you would invest 48.00 in China Everbright Limited on September 4, 2024 and sell it today you would earn a total of 20.00 from holding China Everbright Limited or generate 41.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Everbright Limited vs. Blackrock International Growth
Performance |
| Timeline |
| China Everbright |
| Blackrock International |
China Everbright and Blackrock International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Everbright and Blackrock International
The main advantage of trading using opposite China Everbright and Blackrock International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Everbright position performs unexpectedly, Blackrock International 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 International will offset losses from the drop in Blackrock International's long position.| China Everbright vs. Blackrock International Growth | China Everbright vs. Blackrock Enhanced Equity | China Everbright vs. Eaton Vance Tax | China Everbright vs. Blackrock Resources Commodities |
| Blackrock International vs. Blackrock Enhanced Equity | Blackrock International vs. Eaton Vance Tax | Blackrock International vs. Blackrock Resources Commodities | Blackrock International vs. BlackRock MIT II |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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