Correlation Between Blackrock Innovation and Highland Global

Can any of the company-specific risk be diversified away by investing in both Blackrock Innovation and Highland Global 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 Global 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 Global Allocation, you can compare the effects of market volatilities on Blackrock Innovation and Highland Global 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 Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackrock Innovation and Highland Global.

Diversification Opportunities for Blackrock Innovation and Highland Global

0.18

Correlation Coefficient

Blackrock Innovation  Highland Global

Average diversification

The 3 months correlation between Blackrock and Highland is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Blackrock Innovation Growth and Highland Global Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Highland Global Allo 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 Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Highland Global Allo has no effect on the direction of Blackrock Innovation i.e., Blackrock Innovation and Highland Global go up and down completely randomly.

Pair Corralation between Blackrock Innovation and Highland Global

Given the investment horizon of 90 days Blackrock Innovation Growth is expected to generate 1.09 times more return on investment than Highland Global. However, Blackrock Innovation is 1.09 times more volatile than Highland Global Allocation. It trades about 0.19 of its potential returns per unit of risk. Highland Global Allocation is currently generating about 0.04 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 Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Blackrock Innovation Growth  vs.  Highland Global Allocation

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 Global Allo

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Highland Global Allocation are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat strong essential indicators, Highland Global is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Blackrock Innovation and Highland Global

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

The idea behind Blackrock Innovation Growth and Highland Global Allocation 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.

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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.