Correlation Between Made Tech and BlackRock Frontiers
Can any of the company-specific risk be diversified away by investing in both Made Tech and BlackRock Frontiers 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 Made Tech and BlackRock Frontiers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Made Tech Group and BlackRock Frontiers Investment, you can compare the effects of market volatilities on Made Tech and BlackRock Frontiers 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 Made Tech with a short position of BlackRock Frontiers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Made Tech and BlackRock Frontiers.
Diversification Opportunities for Made Tech and BlackRock Frontiers
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Made and BlackRock is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Made Tech Group and BlackRock Frontiers Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BlackRock Frontiers and Made Tech 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 Made Tech Group are associated (or correlated) with BlackRock Frontiers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BlackRock Frontiers has no effect on the direction of Made Tech i.e., Made Tech and BlackRock Frontiers go up and down completely randomly.
Pair Corralation between Made Tech and BlackRock Frontiers
Assuming the 90 days trading horizon Made Tech Group is expected to generate 4.16 times more return on investment than BlackRock Frontiers. However, Made Tech is 4.16 times more volatile than BlackRock Frontiers Investment. It trades about 0.13 of its potential returns per unit of risk. BlackRock Frontiers Investment is currently generating about 0.25 per unit of risk. If you would invest 2,350 in Made Tech Group on October 11, 2024 and sell it today you would earn a total of 175.00 from holding Made Tech Group or generate 7.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.0% |
| Values | Daily Returns |
Made Tech Group vs. BlackRock Frontiers Investment
Performance |
| Timeline |
| Made Tech Group |
| BlackRock Frontiers |
Made Tech and BlackRock Frontiers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Made Tech and BlackRock Frontiers
The main advantage of trading using opposite Made Tech and BlackRock Frontiers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Made Tech position performs unexpectedly, BlackRock Frontiers 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 Frontiers will offset losses from the drop in BlackRock Frontiers' long position.| Made Tech vs. JD Sports Fashion | Made Tech vs. Blackstone Loan Financing | Made Tech vs. Martin Marietta Materials | Made Tech vs. alstria office REIT AG |
| BlackRock Frontiers vs. SupplyMe Capital PLC | BlackRock Frontiers vs. SM Energy Co | BlackRock Frontiers vs. FuelCell Energy | BlackRock Frontiers vs. Grand Vision Media |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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