Correlation Between BlackRock TCP and Cornerstone Strategic
Can any of the company-specific risk be diversified away by investing in both BlackRock TCP and Cornerstone Strategic 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 TCP and Cornerstone Strategic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BlackRock TCP Capital and Cornerstone Strategic Value, you can compare the effects of market volatilities on BlackRock TCP and Cornerstone Strategic 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 TCP with a short position of Cornerstone Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of BlackRock TCP and Cornerstone Strategic.
Diversification Opportunities for BlackRock TCP and Cornerstone Strategic
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between BlackRock and Cornerstone is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding BlackRock TCP Capital and Cornerstone Strategic Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cornerstone Strategic and BlackRock TCP 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 TCP Capital are associated (or correlated) with Cornerstone Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cornerstone Strategic has no effect on the direction of BlackRock TCP i.e., BlackRock TCP and Cornerstone Strategic go up and down completely randomly.
Pair Corralation between BlackRock TCP and Cornerstone Strategic
Given the investment horizon of 90 days BlackRock TCP is expected to generate 1.17 times less return on investment than Cornerstone Strategic. In addition to that, BlackRock TCP is 2.8 times more volatile than Cornerstone Strategic Value. It trades about 0.18 of its total potential returns per unit of risk. Cornerstone Strategic Value is currently generating about 0.57 per unit of volatility. If you would invest 791.00 in Cornerstone Strategic Value on August 27, 2024 and sell it today you would earn a total of 88.00 from holding Cornerstone Strategic Value or generate 11.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BlackRock TCP Capital vs. Cornerstone Strategic Value
Performance |
| Timeline |
| BlackRock TCP Capital |
| Cornerstone Strategic |
BlackRock TCP and Cornerstone Strategic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BlackRock TCP and Cornerstone Strategic
The main advantage of trading using opposite BlackRock TCP and Cornerstone Strategic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BlackRock TCP position performs unexpectedly, Cornerstone Strategic 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 Cornerstone Strategic will offset losses from the drop in Cornerstone Strategic's long position.| BlackRock TCP vs. Triplepoint Venture Growth | BlackRock TCP vs. Sixth Street Specialty | BlackRock TCP vs. Golub Capital BDC | BlackRock TCP vs. New Mountain Finance |
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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