Correlation Between Legal General and Blackrock International
Can any of the company-specific risk be diversified away by investing in both Legal General and Blackrock International 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 Legal General and Blackrock International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Legal General Group and Blackrock International Growth, you can compare the effects of market volatilities on Legal General and Blackrock International 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 Legal General with a short position of Blackrock International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Legal General and Blackrock International.
Diversification Opportunities for Legal General and Blackrock International
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Legal and Blackrock is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Legal General Group and Blackrock International Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock International and Legal General 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 Legal General Group are associated (or correlated) with Blackrock International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock International has no effect on the direction of Legal General i.e., Legal General and Blackrock International go up and down completely randomly.
Pair Corralation between Legal General and Blackrock International
Assuming the 90 days horizon Legal General Group is expected to under-perform the Blackrock International. But the pink sheet apears to be less risky and, when comparing its historical volatility, Legal General Group is 1.51 times less risky than Blackrock International. The pink sheet trades about -0.05 of its potential returns per unit of risk. The Blackrock International Growth is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 546.00 in Blackrock International Growth on September 5, 2024 and sell it today you would earn a total of 13.00 from holding Blackrock International Growth or generate 2.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Legal General Group vs. Blackrock International Growth
Performance |
| Timeline |
| Legal General Group |
| Blackrock International |
Legal General and Blackrock International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Legal General and Blackrock International
The main advantage of trading using opposite Legal General and Blackrock International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Legal General position performs unexpectedly, Blackrock International 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 International will offset losses from the drop in Blackrock International's long position.| Legal General vs. Blackrock International Growth | Legal General vs. Blackrock Enhanced Equity | Legal General vs. Eaton Vance Tax | Legal General vs. Blackrock Resources Commodities |
| Blackrock International vs. Eaton Vance Risk | Blackrock International vs. Eaton Vance Tax | Blackrock International vs. Eaton Vance Limited | Blackrock International vs. Blackrock Muniholdings Closed |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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