Correlation Between BlackRock and 4 Less

Can any of the company-specific risk be diversified away by investing in both BlackRock and 4 Less 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 and 4 Less into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between BlackRock and 4 Less Group, you can compare the effects of market volatilities on BlackRock and 4 Less 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 with a short position of 4 Less. Check out your portfolio center. Please also check ongoing floating volatility patterns of BlackRock and 4 Less.

Diversification Opportunities for BlackRock and 4 Less

-0.84

Correlation Coefficient

BlackRock  4 Less

Pay attention - limited upside

The 3 months correlation between BlackRock and FLES is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding BlackRock and 4 Less Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 4 Less Group and BlackRock 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 are associated (or correlated) with 4 Less. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 4 Less Group has no effect on the direction of BlackRock i.e., BlackRock and 4 Less go up and down completely randomly.

Pair Corralation between BlackRock and 4 Less

Considering the 90-day investment horizon BlackRock is expected to generate 6.31 times less return on investment than 4 Less. But when comparing it to its historical volatility, BlackRock is 19.86 times less risky than 4 Less. It trades about 0.15 of its potential returns per unit of risk. 4 Less Group is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  0.04  in 4 Less Group on September 25, 2024 and sell it today you would lose (0.02) from holding 4 Less Group or give up 50.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	96.92%
Values	Daily Returns

BlackRock  vs.  4 Less Group

BlackRock

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in BlackRock are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite quite inconsistent essential indicators, BlackRock may actually be approaching a critical reversion point that can send shares even higher in January 2025.

4 Less Group

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in 4 Less Group are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent technical and fundamental indicators, 4 Less unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BlackRock and 4 Less

The main advantage of trading using opposite BlackRock and 4 Less positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BlackRock position performs unexpectedly, 4 Less 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 4 Less will offset losses from the drop in 4 Less' long position.

The idea behind BlackRock and 4 Less Group 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.