Correlation Between BlackRock ESG and Avantium Holding
Can any of the company-specific risk be diversified away by investing in both BlackRock ESG and Avantium Holding 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 ESG and Avantium Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BlackRock ESG Multi Asset and Avantium Holding BV, you can compare the effects of market volatilities on BlackRock ESG and Avantium Holding 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 ESG with a short position of Avantium Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of BlackRock ESG and Avantium Holding.
Diversification Opportunities for BlackRock ESG and Avantium Holding
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BlackRock and Avantium is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding BlackRock ESG Multi Asset and Avantium Holding BV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avantium Holding and BlackRock ESG 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 ESG Multi Asset are associated (or correlated) with Avantium Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avantium Holding has no effect on the direction of BlackRock ESG i.e., BlackRock ESG and Avantium Holding go up and down completely randomly.
Pair Corralation between BlackRock ESG and Avantium Holding
Assuming the 90 days trading horizon BlackRock ESG Multi Asset is expected to under-perform the Avantium Holding. But the etf apears to be less risky and, when comparing its historical volatility, BlackRock ESG Multi Asset is 2.77 times less risky than Avantium Holding. The etf trades about -0.1 of its potential returns per unit of risk. The Avantium Holding BV is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 172.00 in Avantium Holding BV on November 28, 2024 and sell it today you would earn a total of 9.00 from holding Avantium Holding BV or generate 5.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
BlackRock ESG Multi Asset vs. Avantium Holding BV
Performance |
| Timeline |
| BlackRock ESG Multi |
| Avantium Holding |
BlackRock ESG and Avantium Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BlackRock ESG and Avantium Holding
The main advantage of trading using opposite BlackRock ESG and Avantium Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BlackRock ESG position performs unexpectedly, Avantium Holding 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 Avantium Holding will offset losses from the drop in Avantium Holding's long position.| BlackRock ESG vs. BlackRock ESG Multi Asset | BlackRock ESG vs. LG Russell 2000 | BlackRock ESG vs. iShares MSCI EM | BlackRock ESG vs. VanEck Multi Asset Growth |
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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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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