Correlation Between Capital Group and BlackRock Intermediate
Can any of the company-specific risk be diversified away by investing in both Capital Group and BlackRock Intermediate 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 Group and BlackRock Intermediate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capital Group Core and BlackRock Intermediate Muni, you can compare the effects of market volatilities on Capital Group and BlackRock Intermediate 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 Group with a short position of BlackRock Intermediate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capital Group and BlackRock Intermediate.
Diversification Opportunities for Capital Group and BlackRock Intermediate
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Capital and BlackRock is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Capital Group Core and BlackRock Intermediate Muni in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BlackRock Intermediate and Capital Group 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 Group Core are associated (or correlated) with BlackRock Intermediate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BlackRock Intermediate has no effect on the direction of Capital Group i.e., Capital Group and BlackRock Intermediate go up and down completely randomly.
Pair Corralation between Capital Group and BlackRock Intermediate
Given the investment horizon of 90 days Capital Group is expected to generate 1.33 times less return on investment than BlackRock Intermediate. In addition to that, Capital Group is 1.03 times more volatile than BlackRock Intermediate Muni. It trades about 0.11 of its total potential returns per unit of risk. BlackRock Intermediate Muni is currently generating about 0.15 per unit of volatility. If you would invest 2,368 in BlackRock Intermediate Muni on August 31, 2024 and sell it today you would earn a total of 24.00 from holding BlackRock Intermediate Muni or generate 1.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Capital Group Core vs. BlackRock Intermediate Muni
Performance |
| Timeline |
| Capital Group Core |
| BlackRock Intermediate |
Capital Group and BlackRock Intermediate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capital Group and BlackRock Intermediate
The main advantage of trading using opposite Capital Group and BlackRock Intermediate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capital Group position performs unexpectedly, BlackRock Intermediate 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 Intermediate will offset losses from the drop in BlackRock Intermediate's long position.| Capital Group vs. SSGA Active Trust | Capital Group vs. BlackRock Intermediate Muni | Capital Group vs. iShares BBB Rated | Capital Group vs. Xtrackers Short Duration |
| BlackRock Intermediate vs. iShares JP Morgan | BlackRock Intermediate vs. iShares iBoxx Investment | BlackRock Intermediate vs. SPDR Nuveen Bloomberg | BlackRock Intermediate vs. iShares MBS ETF |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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