Correlation Between Blackrock Innovation and Highland Floating

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

By analyzing existing cross correlation between Blackrock Innovation Growth and Highland Floating Rate, you can compare the effects of market volatilities on Blackrock Innovation and Highland Floating 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 Innovation with a short position of Highland Floating. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackrock Innovation and Highland Floating.

Diversification Opportunities for Blackrock Innovation and Highland Floating

-0.49

Correlation Coefficient

Blackrock Innovation  Highland Floating

Very good diversification

The 3 months correlation between Blackrock and Highland is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Blackrock Innovation Growth and Highland Floating Rate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Highland Floating Rate and Blackrock Innovation 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 Innovation Growth are associated (or correlated) with Highland Floating. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Highland Floating Rate has no effect on the direction of Blackrock Innovation i.e., Blackrock Innovation and Highland Floating go up and down completely randomly.

Pair Corralation between Blackrock Innovation and Highland Floating

Given the investment horizon of 90 days Blackrock Innovation Growth is expected to generate 0.65 times more return on investment than Highland Floating. However, Blackrock Innovation Growth is 1.55 times less risky than Highland Floating. It trades about 0.19 of its potential returns per unit of risk. Highland Floating Rate is currently generating about 0.03 per unit of risk. If you would invest  711.00  in Blackrock Innovation Growth on September 2, 2024 and sell it today you would earn a total of  88.00  from holding Blackrock Innovation Growth or generate 12.38% return on investment over 90 days.

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

Blackrock Innovation Growth  vs.  Highland Floating Rate

Blackrock Innovation

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Blackrock Innovation Growth are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak technical and fundamental indicators, Blackrock Innovation may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Highland Floating Rate

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Highland Floating Rate are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of very healthy basic indicators, Highland Floating is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Blackrock Innovation and Highland Floating

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

The idea behind Blackrock Innovation Growth and Highland Floating Rate 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.