Correlation Between BlackRock MIT and Blackrock International

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

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

Diversification Opportunities for BlackRock MIT and Blackrock International

0.48

Correlation Coefficient

BlackRock MIT  Blackrock International

Very weak diversification

The 3 months correlation between BlackRock and Blackrock is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding BlackRock MIT II and Blackrock International Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock International and BlackRock MIT 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 MIT II are associated (or correlated) with Blackrock International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock International has no effect on the direction of BlackRock MIT i.e., BlackRock MIT and Blackrock International go up and down completely randomly.

Pair Corralation between BlackRock MIT and Blackrock International

Considering the 90-day investment horizon BlackRock MIT is expected to generate 1.57 times less return on investment than Blackrock International. But when comparing it to its historical volatility, BlackRock MIT II is 1.39 times less risky than Blackrock International. It trades about 0.05 of its potential returns per unit of risk. Blackrock International Growth is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  443.00  in Blackrock International Growth on September 5, 2024 and sell it today you would earn a total of  114.00  from holding Blackrock International Growth or generate 25.73% return on investment over 90 days.

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

BlackRock MIT II  vs.  Blackrock International Growth

BlackRock MIT II

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in BlackRock MIT II are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound essential indicators, BlackRock MIT is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Blackrock International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Blackrock International Growth has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, Blackrock International 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 MIT and Blackrock International

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

The idea behind BlackRock MIT II and Blackrock International Growth 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.