Correlation Between First Trust and Blackrock Floating
Can any of the company-specific risk be diversified away by investing in both First Trust and Blackrock Floating 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 First Trust and Blackrock Floating into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Trust Senior and Blackrock Floating Rate, you can compare the effects of market volatilities on First Trust and Blackrock Floating 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 First Trust with a short position of Blackrock Floating. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Trust and Blackrock Floating.
Diversification Opportunities for First Trust and Blackrock Floating
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between First and Blackrock is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding First Trust Senior and Blackrock Floating Rate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Floating Rate and First Trust 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 First Trust Senior are associated (or correlated) with Blackrock Floating. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock Floating Rate has no effect on the direction of First Trust i.e., First Trust and Blackrock Floating go up and down completely randomly.
Pair Corralation between First Trust and Blackrock Floating
Considering the 90-day investment horizon First Trust is expected to generate 1.99 times less return on investment than Blackrock Floating. But when comparing it to its historical volatility, First Trust Senior is 1.17 times less risky than Blackrock Floating. It trades about 0.08 of its potential returns per unit of risk. Blackrock Floating Rate is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 1,227 in Blackrock Floating Rate on August 28, 2024 and sell it today you would earn a total of 161.00 from holding Blackrock Floating Rate or generate 13.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Trust Senior vs. Blackrock Floating Rate
Performance |
| Timeline |
| First Trust Senior |
| Blackrock Floating Rate |
First Trust and Blackrock Floating Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Trust and Blackrock Floating
The main advantage of trading using opposite First Trust and Blackrock Floating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Trust position performs unexpectedly, Blackrock Floating 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 Floating will offset losses from the drop in Blackrock Floating's long position.| First Trust vs. Blackstone Gso Long | First Trust vs. Eaton Vance Senior | First Trust vs. Western Asset Global | First Trust vs. Western Asset Global |
| Blackrock Floating vs. Eaton Vance Floating | Blackrock Floating vs. NXG NextGen Infrastructure | Blackrock Floating vs. GAMCO Natural Resources | Blackrock Floating vs. MFS Investment Grade |
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.
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