Correlation Between American Funds and Blackrock Lifepath
Can any of the company-specific risk be diversified away by investing in both American Funds and Blackrock Lifepath 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 American Funds and Blackrock Lifepath into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Funds 2055 and Blackrock Lifepath Esg, you can compare the effects of market volatilities on American Funds and Blackrock Lifepath 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 American Funds with a short position of Blackrock Lifepath. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Funds and Blackrock Lifepath.
Diversification Opportunities for American Funds and Blackrock Lifepath
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between American and Blackrock is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding American Funds 2055 and Blackrock Lifepath Esg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Lifepath Esg and American Funds 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 American Funds 2055 are associated (or correlated) with Blackrock Lifepath. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock Lifepath Esg has no effect on the direction of American Funds i.e., American Funds and Blackrock Lifepath go up and down completely randomly.
Pair Corralation between American Funds and Blackrock Lifepath
Assuming the 90 days horizon American Funds is expected to generate 1.13 times less return on investment than Blackrock Lifepath. But when comparing it to its historical volatility, American Funds 2055 is 1.1 times less risky than Blackrock Lifepath. It trades about 0.04 of its potential returns per unit of risk. Blackrock Lifepath Esg is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,097 in Blackrock Lifepath Esg on January 18, 2025 and sell it today you would earn a total of 230.00 from holding Blackrock Lifepath Esg or generate 20.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.8% |
| Values | Daily Returns |
American Funds 2055 vs. Blackrock Lifepath Esg
Performance |
| Timeline |
| American Funds 2055 |
| Blackrock Lifepath Esg |
American Funds and Blackrock Lifepath Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Funds and Blackrock Lifepath
The main advantage of trading using opposite American Funds and Blackrock Lifepath positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Funds position performs unexpectedly, Blackrock Lifepath 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 Lifepath will offset losses from the drop in Blackrock Lifepath's long position.| American Funds vs. American Funds 2015 | American Funds vs. Fidelity Advisor International | American Funds vs. American Funds 2055 | American Funds vs. American Funds 2055 |
| Blackrock Lifepath vs. Gabelli Gold Fund | Blackrock Lifepath vs. Vy Goldman Sachs | Blackrock Lifepath vs. Deutsche Gold Precious | Blackrock Lifepath vs. Oppenheimer Gold Special |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
Other Complementary Tools
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |