Correlation Between Blackrock and Federated Emerging
Can any of the company-specific risk be diversified away by investing in both Blackrock and Federated Emerging 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 and Federated Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Blackrock Sm Cap and Federated Emerging Market, you can compare the effects of market volatilities on Blackrock and Federated Emerging 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 with a short position of Federated Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackrock and Federated Emerging.
Diversification Opportunities for Blackrock and Federated Emerging
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Blackrock and Federated is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Blackrock Sm Cap and Federated Emerging Market in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Emerging Market and Blackrock 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 Sm Cap are associated (or correlated) with Federated Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Emerging Market has no effect on the direction of Blackrock i.e., Blackrock and Federated Emerging go up and down completely randomly.
Pair Corralation between Blackrock and Federated Emerging
Assuming the 90 days horizon Blackrock Sm Cap is expected to generate 5.19 times more return on investment than Federated Emerging. However, Blackrock is 5.19 times more volatile than Federated Emerging Market. It trades about 0.29 of its potential returns per unit of risk. Federated Emerging Market is currently generating about 0.12 per unit of risk. If you would invest 2,522 in Blackrock Sm Cap on September 3, 2024 and sell it today you would earn a total of 248.00 from holding Blackrock Sm Cap or generate 9.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Blackrock Sm Cap vs. Federated Emerging Market
Performance |
| Timeline |
| Blackrock Sm Cap |
| Federated Emerging Market |
Blackrock and Federated Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Blackrock and Federated Emerging
The main advantage of trading using opposite Blackrock and Federated Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blackrock position performs unexpectedly, Federated Emerging 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 Federated Emerging will offset losses from the drop in Federated Emerging's long position.| Blackrock vs. Blackrock Intern Index | Blackrock vs. Blackrock Sp 500 | Blackrock vs. Blackrock Bond Index | Blackrock vs. Midcap Fund R 4 |
| Federated Emerging vs. Pgim Jennison Diversified | Federated Emerging vs. Legg Mason Bw | Federated Emerging vs. Blackrock Sm Cap | Federated Emerging vs. Northern Small Cap |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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