Correlation Between Blackrock Enhanced and Western Asset
Can any of the company-specific risk be diversified away by investing in both Blackrock Enhanced and Western Asset 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 Enhanced and Western Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Blackrock Enhanced Capital and Western Asset High, you can compare the effects of market volatilities on Blackrock Enhanced and Western Asset 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 Enhanced with a short position of Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackrock Enhanced and Western Asset.
Diversification Opportunities for Blackrock Enhanced and Western Asset
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Blackrock and Western is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Blackrock Enhanced Capital and Western Asset High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset High and Blackrock Enhanced 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 Enhanced Capital are associated (or correlated) with Western Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Asset High has no effect on the direction of Blackrock Enhanced i.e., Blackrock Enhanced and Western Asset go up and down completely randomly.
Pair Corralation between Blackrock Enhanced and Western Asset
Considering the 90-day investment horizon Blackrock Enhanced Capital is expected to generate 0.86 times more return on investment than Western Asset. However, Blackrock Enhanced Capital is 1.16 times less risky than Western Asset. It trades about 0.07 of its potential returns per unit of risk. Western Asset High is currently generating about 0.04 per unit of risk. If you would invest 1,630 in Blackrock Enhanced Capital on August 27, 2024 and sell it today you would earn a total of 341.00 from holding Blackrock Enhanced Capital or generate 20.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Blackrock Enhanced Capital vs. Western Asset High
Performance |
| Timeline |
| Blackrock Enhanced |
| Western Asset High |
Blackrock Enhanced and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Blackrock Enhanced and Western Asset
The main advantage of trading using opposite Blackrock Enhanced and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blackrock Enhanced position performs unexpectedly, Western Asset 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 Western Asset will offset losses from the drop in Western Asset's long position.| Blackrock Enhanced vs. Blackrock Resources Commodities | Blackrock Enhanced vs. Blackrock International Growth | Blackrock Enhanced vs. BlackRock Global Opportunities | Blackrock Enhanced vs. Eaton Vance Tax |
| Western Asset vs. Western Asset High | Western Asset vs. Western Asset High | Western Asset vs. Blackrock Debt Strategies | Western Asset vs. Western Asset Diversified |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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