Correlation Between BlackRock ESG and Legal General
Can any of the company-specific risk be diversified away by investing in both BlackRock ESG and Legal General 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 Legal General 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 Legal General UCITS, you can compare the effects of market volatilities on BlackRock ESG and Legal General 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 Legal General. Check out your portfolio center. Please also check ongoing floating volatility patterns of BlackRock ESG and Legal General.
Diversification Opportunities for BlackRock ESG and Legal General
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between BlackRock and Legal is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding BlackRock ESG Multi Asset and Legal General UCITS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Legal General UCITS 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 Legal General. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Legal General UCITS has no effect on the direction of BlackRock ESG i.e., BlackRock ESG and Legal General go up and down completely randomly.
Pair Corralation between BlackRock ESG and Legal General
Assuming the 90 days trading horizon BlackRock ESG Multi Asset is expected to generate 0.44 times more return on investment than Legal General. However, BlackRock ESG Multi Asset is 2.3 times less risky than Legal General. It trades about -0.08 of its potential returns per unit of risk. Legal General UCITS is currently generating about -0.14 per unit of risk. If you would invest 622.00 in BlackRock ESG Multi Asset on December 1, 2024 and sell it today you would lose (7.00) from holding BlackRock ESG Multi Asset or give up 1.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
BlackRock ESG Multi Asset vs. Legal General UCITS
Performance |
| Timeline |
| BlackRock ESG Multi |
| Legal General UCITS |
BlackRock ESG and Legal General Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BlackRock ESG and Legal General
The main advantage of trading using opposite BlackRock ESG and Legal General positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BlackRock ESG position performs unexpectedly, Legal General 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 Legal General will offset losses from the drop in Legal General's long position.| BlackRock ESG vs. Vanguard SP 500 | BlackRock ESG vs. SPDR Dow Jones | BlackRock ESG vs. iShares Core MSCI | BlackRock ESG vs. iShares SP 500 |
| Legal General vs. Legal General UCITS | Legal General vs. LG Russell 2000 | Legal General vs. iShares MSCI EM | Legal General vs. VanEck Multi Asset Growth |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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