Correlation Between Federated Global and Blackrock
Can any of the company-specific risk be diversified away by investing in both Federated Global and Blackrock 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 Federated Global and Blackrock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federated Global Total and Blackrock Government Bond, you can compare the effects of market volatilities on Federated Global and Blackrock 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 Federated Global with a short position of Blackrock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Global and Blackrock.
Diversification Opportunities for Federated Global and Blackrock
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Federated and Blackrock is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Federated Global Total and Blackrock Government Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Government Bond and Federated Global 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 Federated Global Total are associated (or correlated) with Blackrock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock Government Bond has no effect on the direction of Federated Global i.e., Federated Global and Blackrock go up and down completely randomly.
Pair Corralation between Federated Global and Blackrock
Assuming the 90 days horizon Federated Global is expected to generate 1.98 times less return on investment than Blackrock. In addition to that, Federated Global is 1.23 times more volatile than Blackrock Government Bond. It trades about 0.05 of its total potential returns per unit of risk. Blackrock Government Bond is currently generating about 0.12 per unit of volatility. If you would invest 906.00 in Blackrock Government Bond on September 1, 2024 and sell it today you would earn a total of 9.00 from holding Blackrock Government Bond or generate 0.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Federated Global Total vs. Blackrock Government Bond
Performance |
| Timeline |
| Federated Global Total |
| Blackrock Government Bond |
Federated Global and Blackrock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Global and Blackrock
The main advantage of trading using opposite Federated Global and Blackrock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Global position performs unexpectedly, Blackrock 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 will offset losses from the drop in Blackrock's long position.| Federated Global vs. Federated Emerging Market | Federated Global vs. Federated Mdt All | Federated Global vs. Federated Mdt Balanced | Federated Global vs. Federated Global Allocation |
| Blackrock vs. Blackrock High Yield | Blackrock vs. Fidelity Capital Income | Blackrock vs. Prudential Short Duration | Blackrock vs. Gmo 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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