Correlation Between Amg River and Blackrock Strategic

Can any of the company-specific risk be diversified away by investing in both Amg River and Blackrock 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 Amg River and Blackrock Strategic into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Amg River Road and Blackrock Strategic Global, you can compare the effects of market volatilities on Amg River and Blackrock 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 Amg River with a short position of Blackrock Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amg River and Blackrock Strategic.

Diversification Opportunities for Amg River and Blackrock Strategic

-0.72

Correlation Coefficient

Amg River  Blackrock Strategic

Pay attention - limited upside

The 3 months correlation between Amg and Blackrock is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Amg River Road and Blackrock Strategic Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Strategic and Amg River 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 Amg River Road are associated (or correlated) with Blackrock Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock Strategic has no effect on the direction of Amg River i.e., Amg River and Blackrock Strategic go up and down completely randomly.

Pair Corralation between Amg River and Blackrock Strategic

Assuming the 90 days horizon Amg River Road is expected to generate 3.46 times more return on investment than Blackrock Strategic. However, Amg River is 3.46 times more volatile than Blackrock Strategic Global. It trades about 0.2 of its potential returns per unit of risk. Blackrock Strategic Global is currently generating about -0.13 per unit of risk. If you would invest  1,536  in Amg River Road on September 13, 2024 and sell it today you would earn a total of  203.00  from holding Amg River Road or generate 13.22% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Amg River Road  vs.  Blackrock Strategic Global

Amg River Road

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Amg River Road are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Amg River showed solid returns over the last few months and may actually be approaching a breakup point.

Blackrock Strategic

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Blackrock Strategic Global has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Blackrock Strategic is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Amg River and Blackrock Strategic

The main advantage of trading using opposite Amg River and Blackrock Strategic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amg River position performs unexpectedly, Blackrock 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 Blackrock Strategic will offset losses from the drop in Blackrock Strategic's long position.

The idea behind Amg River Road and Blackrock Strategic Global pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.