Correlation Between IHIT and Blackrock Innovation
Can any of the company-specific risk be diversified away by investing in both IHIT and Blackrock Innovation 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 IHIT and Blackrock Innovation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IHIT and Blackrock Innovation Growth, you can compare the effects of market volatilities on IHIT and Blackrock Innovation 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 IHIT with a short position of Blackrock Innovation. Check out your portfolio center. Please also check ongoing floating volatility patterns of IHIT and Blackrock Innovation.
Diversification Opportunities for IHIT and Blackrock Innovation
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between IHIT and Blackrock is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding IHIT and Blackrock Innovation Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Innovation and IHIT 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 IHIT are associated (or correlated) with Blackrock Innovation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock Innovation has no effect on the direction of IHIT i.e., IHIT and Blackrock Innovation go up and down completely randomly.
Pair Corralation between IHIT and Blackrock Innovation
Given the investment horizon of 90 days IHIT is expected to under-perform the Blackrock Innovation. But the etf apears to be less risky and, when comparing its historical volatility, IHIT is 2.58 times less risky than Blackrock Innovation. The etf trades about -0.06 of its potential returns per unit of risk. The Blackrock Innovation Growth is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 575.00 in Blackrock Innovation Growth on August 30, 2024 and sell it today you would earn a total of 217.00 from holding Blackrock Innovation Growth or generate 37.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 31.11% |
| Values | Daily Returns |
IHIT vs. Blackrock Innovation Growth
Performance |
| Timeline |
| IHIT |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Blackrock Innovation |
IHIT and Blackrock Innovation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IHIT and Blackrock Innovation
The main advantage of trading using opposite IHIT and Blackrock Innovation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IHIT position performs unexpectedly, Blackrock Innovation 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 Innovation will offset losses from the drop in Blackrock Innovation's long position.| IHIT vs. MFS Investment Grade | IHIT vs. Eaton Vance National | IHIT vs. Invesco High Income | IHIT vs. Nuveen California Select |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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