Correlation Between Parametric Intl and Blackrock High
Can any of the company-specific risk be diversified away by investing in both Parametric Intl and Blackrock High 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 Parametric Intl and Blackrock High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Parametric Intl Equity and Blackrock High Yield, you can compare the effects of market volatilities on Parametric Intl and Blackrock High 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 Parametric Intl with a short position of Blackrock High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Parametric Intl and Blackrock High.
Diversification Opportunities for Parametric Intl and Blackrock High
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Parametric and Blackrock is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Parametric Intl Equity and Blackrock High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock High Yield and Parametric Intl 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 Parametric Intl Equity are associated (or correlated) with Blackrock High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock High Yield has no effect on the direction of Parametric Intl i.e., Parametric Intl and Blackrock High go up and down completely randomly.
Pair Corralation between Parametric Intl and Blackrock High
Assuming the 90 days horizon Parametric Intl Equity is expected to generate 2.51 times more return on investment than Blackrock High. However, Parametric Intl is 2.51 times more volatile than Blackrock High Yield. It trades about 0.05 of its potential returns per unit of risk. Blackrock High Yield is currently generating about 0.12 per unit of risk. If you would invest 1,251 in Parametric Intl Equity on September 3, 2024 and sell it today you would earn a total of 233.00 from holding Parametric Intl Equity or generate 18.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Parametric Intl Equity vs. Blackrock High Yield
Performance |
| Timeline |
| Parametric Intl Equity |
| Blackrock High Yield |
Parametric Intl and Blackrock High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Parametric Intl and Blackrock High
The main advantage of trading using opposite Parametric Intl and Blackrock High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Parametric Intl position performs unexpectedly, Blackrock High 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 High will offset losses from the drop in Blackrock High's long position.| Parametric Intl vs. Blackrock High Yield | Parametric Intl vs. Prudential High Yield | Parametric Intl vs. Guggenheim High Yield | Parametric Intl vs. Lord Abbett High |
| Blackrock High vs. Vanguard High Yield Corporate | Blackrock High vs. Vanguard High Yield Porate | Blackrock High vs. Blackrock Hi Yld | Blackrock High vs. Blackrock High Yield |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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