Correlation Between New Alternatives and Blackrock
Can any of the company-specific risk be diversified away by investing in both New Alternatives and Blackrock 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 New Alternatives and Blackrock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between New Alternatives Fund and Blackrock Sm Cap, you can compare the effects of market volatilities on New Alternatives and Blackrock 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 New Alternatives with a short position of Blackrock. Check out your portfolio center. Please also check ongoing floating volatility patterns of New Alternatives and Blackrock.
Diversification Opportunities for New Alternatives and Blackrock
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between New and Blackrock is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding New Alternatives Fund and Blackrock Sm Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Sm Cap and New Alternatives 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 New Alternatives Fund are associated (or correlated) with Blackrock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock Sm Cap has no effect on the direction of New Alternatives i.e., New Alternatives and Blackrock go up and down completely randomly.
Pair Corralation between New Alternatives and Blackrock
Assuming the 90 days horizon New Alternatives Fund is expected to under-perform the Blackrock. But the mutual fund apears to be less risky and, when comparing its historical volatility, New Alternatives Fund is 1.36 times less risky than Blackrock. The mutual fund trades about -0.02 of its potential returns per unit of risk. The Blackrock Sm Cap is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 2,336 in Blackrock Sm Cap on September 1, 2024 and sell it today you would earn a total of 434.00 from holding Blackrock Sm Cap or generate 18.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
New Alternatives Fund vs. Blackrock Sm Cap
Performance |
| Timeline |
| New Alternatives |
| Blackrock Sm Cap |
New Alternatives and Blackrock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New Alternatives and Blackrock
The main advantage of trading using opposite New Alternatives and Blackrock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Alternatives position performs unexpectedly, Blackrock 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 will offset losses from the drop in Blackrock's long position.| New Alternatives vs. T Rowe Price | New Alternatives vs. American Century Investment | New Alternatives vs. Chestnut Street Exchange | New Alternatives vs. Franklin Government Money |
| Blackrock vs. Blackrock Intern Index | Blackrock vs. Blackrock Sp 500 | Blackrock vs. Aquagold International | Blackrock vs. Thrivent High Yield |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
Other Complementary Tools
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |