Correlation Between Extended Market and Blackrock Gbl
Can any of the company-specific risk be diversified away by investing in both Extended Market and Blackrock Gbl 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 Extended Market and Blackrock Gbl into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Extended Market Index and Blackrock Gbl Lng, you can compare the effects of market volatilities on Extended Market and Blackrock Gbl 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 Extended Market with a short position of Blackrock Gbl. Check out your portfolio center. Please also check ongoing floating volatility patterns of Extended Market and Blackrock Gbl.
Diversification Opportunities for Extended Market and Blackrock Gbl
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Extended and Blackrock is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Extended Market Index and Blackrock Gbl Lng in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Gbl Lng and Extended Market 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 Extended Market Index are associated (or correlated) with Blackrock Gbl. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock Gbl Lng has no effect on the direction of Extended Market i.e., Extended Market and Blackrock Gbl go up and down completely randomly.
Pair Corralation between Extended Market and Blackrock Gbl
Assuming the 90 days horizon Extended Market is expected to generate 1.06 times less return on investment than Blackrock Gbl. In addition to that, Extended Market is 2.83 times more volatile than Blackrock Gbl Lng. It trades about 0.05 of its total potential returns per unit of risk. Blackrock Gbl Lng is currently generating about 0.16 per unit of volatility. If you would invest 1,020 in Blackrock Gbl Lng on September 3, 2024 and sell it today you would earn a total of 390.00 from holding Blackrock Gbl Lng or generate 38.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Extended Market Index vs. Blackrock Gbl Lng
Performance |
| Timeline |
| Extended Market Index |
| Blackrock Gbl Lng |
Extended Market and Blackrock Gbl Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Extended Market and Blackrock Gbl
The main advantage of trading using opposite Extended Market and Blackrock Gbl positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Extended Market position performs unexpectedly, Blackrock Gbl 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 Gbl will offset losses from the drop in Blackrock Gbl's long position.| Extended Market vs. Massmutual Select Diversified | Extended Market vs. Templeton Developing Markets | Extended Market vs. Transamerica Emerging Markets | Extended Market vs. Calamos Market Neutral |
| Blackrock Gbl vs. Shelton Emerging Markets | Blackrock Gbl vs. Jpmorgan Emerging Markets | Blackrock Gbl vs. Transamerica Emerging Markets | Blackrock Gbl vs. Mondrian Emerging Markets |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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