Correlation Between Nasdaq 100 and Blackrock Health
Can any of the company-specific risk be diversified away by investing in both Nasdaq 100 and Blackrock Health 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 Nasdaq 100 and Blackrock Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nasdaq 100 Index Fund and Blackrock Health Sciences, you can compare the effects of market volatilities on Nasdaq 100 and Blackrock Health 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 Nasdaq 100 with a short position of Blackrock Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq 100 and Blackrock Health.
Diversification Opportunities for Nasdaq 100 and Blackrock Health
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Nasdaq and Blackrock is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq 100 Index Fund and Blackrock Health Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Health Sciences and Nasdaq 100 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 Nasdaq 100 Index Fund are associated (or correlated) with Blackrock Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock Health Sciences has no effect on the direction of Nasdaq 100 i.e., Nasdaq 100 and Blackrock Health go up and down completely randomly.
Pair Corralation between Nasdaq 100 and Blackrock Health
Assuming the 90 days horizon Nasdaq 100 Index Fund is expected to generate 1.47 times more return on investment than Blackrock Health. However, Nasdaq 100 is 1.47 times more volatile than Blackrock Health Sciences. It trades about 0.09 of its potential returns per unit of risk. Blackrock Health Sciences is currently generating about 0.03 per unit of risk. If you would invest 3,687 in Nasdaq 100 Index Fund on August 31, 2024 and sell it today you would earn a total of 1,575 from holding Nasdaq 100 Index Fund or generate 42.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nasdaq 100 Index Fund vs. Blackrock Health Sciences
Performance |
| Timeline |
| Nasdaq 100 Index |
| Blackrock Health Sciences |
Nasdaq 100 and Blackrock Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nasdaq 100 and Blackrock Health
The main advantage of trading using opposite Nasdaq 100 and Blackrock Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nasdaq 100 position performs unexpectedly, Blackrock Health 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 Health will offset losses from the drop in Blackrock Health's long position.| Nasdaq 100 vs. Europacific Growth Fund | Nasdaq 100 vs. Washington Mutual Investors | Nasdaq 100 vs. Capital World Growth | Nasdaq 100 vs. HUMANA INC |
| Blackrock Health vs. Vy T Rowe | Blackrock Health vs. Eaton Vance Atlanta | Blackrock Health vs. Blackrock Health Sciences | Blackrock Health vs. Blackrock Health Sciences |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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