Correlation Between Blackrock Floating and FAM
Can any of the company-specific risk be diversified away by investing in both Blackrock Floating and FAM 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 Floating and FAM into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Blackrock Floating Rate and FAM, you can compare the effects of market volatilities on Blackrock Floating and FAM 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 Floating with a short position of FAM. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackrock Floating and FAM.
Diversification Opportunities for Blackrock Floating and FAM
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Blackrock and FAM is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Blackrock Floating Rate and FAM in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FAM and Blackrock Floating 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 Floating Rate are associated (or correlated) with FAM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FAM has no effect on the direction of Blackrock Floating i.e., Blackrock Floating and FAM go up and down completely randomly.
Pair Corralation between Blackrock Floating and FAM
Considering the 90-day investment horizon Blackrock Floating is expected to generate 2.59 times less return on investment than FAM. But when comparing it to its historical volatility, Blackrock Floating Rate is 2.15 times less risky than FAM. It trades about 0.29 of its potential returns per unit of risk. FAM is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest 647.00 in FAM on September 12, 2024 and sell it today you would earn a total of 27.00 from holding FAM or generate 4.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 14.29% |
| Values | Daily Returns |
Blackrock Floating Rate vs. FAM
Performance |
| Timeline |
| Blackrock Floating Rate |
| FAM |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Strong
Blackrock Floating and FAM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Blackrock Floating and FAM
The main advantage of trading using opposite Blackrock Floating and FAM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blackrock Floating position performs unexpectedly, FAM 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 FAM will offset losses from the drop in FAM's long position.| Blackrock Floating vs. Cornerstone Strategic Value | Blackrock Floating vs. Oxford Lane Capital | Blackrock Floating vs. Orchid Island Capital | Blackrock Floating vs. Guggenheim Strategic Opportunities |
| FAM vs. Brookfield Real Assets | FAM vs. Guggenheim Strategic Opportunities | FAM vs. Cornerstone Strategic Return | FAM vs. Cornerstone Strategic Value |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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