Correlation Between Blackrock Enhanced and Highland Funds
Can any of the company-specific risk be diversified away by investing in both Blackrock Enhanced and Highland Funds 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 Highland Funds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Blackrock Enhanced Government and Highland Funds I, you can compare the effects of market volatilities on Blackrock Enhanced and Highland Funds 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 Highland Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackrock Enhanced and Highland Funds.
Diversification Opportunities for Blackrock Enhanced and Highland Funds
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Blackrock and Highland is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Blackrock Enhanced Government and Highland Funds I in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Highland Funds I 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 Government are associated (or correlated) with Highland Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Highland Funds I has no effect on the direction of Blackrock Enhanced i.e., Blackrock Enhanced and Highland Funds go up and down completely randomly.
Pair Corralation between Blackrock Enhanced and Highland Funds
Considering the 90-day investment horizon Blackrock Enhanced Government is expected to generate 1.6 times more return on investment than Highland Funds. However, Blackrock Enhanced is 1.6 times more volatile than Highland Funds I. It trades about 0.08 of its potential returns per unit of risk. Highland Funds I is currently generating about -0.01 per unit of risk. If you would invest 903.00 in Blackrock Enhanced Government on August 28, 2024 and sell it today you would earn a total of 101.00 from holding Blackrock Enhanced Government or generate 11.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Blackrock Enhanced Government vs. Highland Funds I
Performance |
| Timeline |
| Blackrock Enhanced |
| Highland Funds I |
Blackrock Enhanced and Highland Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Blackrock Enhanced and Highland Funds
The main advantage of trading using opposite Blackrock Enhanced and Highland Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blackrock Enhanced position performs unexpectedly, Highland Funds 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 Highland Funds will offset losses from the drop in Highland Funds' long position.The idea behind Blackrock Enhanced Government and Highland Funds I pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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