Correlation Between BlackRock New and CBH

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

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

Diversification Opportunities for BlackRock New and CBH

-0.39

Correlation Coefficient

BlackRock New  CBH

Very good diversification

The 3 months correlation between BlackRock and CBH is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding BlackRock New York and CBH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CBH and BlackRock New 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 New York are associated (or correlated) with CBH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CBH has no effect on the direction of BlackRock New i.e., BlackRock New and CBH go up and down completely randomly.

Pair Corralation between BlackRock New and CBH

If you would invest  1,060  in BlackRock New York on September 1, 2024 and sell it today you would earn a total of  10.00  from holding BlackRock New York or generate 0.94% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	1.59%
Values	Daily Returns

BlackRock New York  vs.  CBH

BlackRock New York

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in BlackRock New York are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, BlackRock New is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

CBH

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CBH has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong fundamental drivers, CBH is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with BlackRock New and CBH

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

The idea behind BlackRock New York and CBH 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.