Correlation Between Bats Series and Blackrock Secured

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

By analyzing existing cross correlation between Bats Series M and Blackrock Secured Credit, you can compare the effects of market volatilities on Bats Series and Blackrock Secured 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 Bats Series with a short position of Blackrock Secured. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bats Series and Blackrock Secured.

Diversification Opportunities for Bats Series and Blackrock Secured

0.77

Correlation Coefficient

Bats Series  Blackrock Secured

Poor diversification

The 3 months correlation between Bats and Blackrock is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Bats Series M and Blackrock Secured Credit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Secured Credit and Bats Series 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 Bats Series M are associated (or correlated) with Blackrock Secured. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock Secured Credit has no effect on the direction of Bats Series i.e., Bats Series and Blackrock Secured go up and down completely randomly.

Pair Corralation between Bats Series and Blackrock Secured

Assuming the 90 days horizon Bats Series M is expected to under-perform the Blackrock Secured. In addition to that, Bats Series is 2.08 times more volatile than Blackrock Secured Credit. It trades about -0.14 of its total potential returns per unit of risk. Blackrock Secured Credit is currently generating about -0.04 per unit of volatility. If you would invest  904.00  in Blackrock Secured Credit on September 15, 2024 and sell it today you would lose (4.00) from holding Blackrock Secured Credit or give up 0.44% of portfolio value over 90 days.

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

Bats Series M  vs.  Blackrock Secured Credit

Bats Series M

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bats Series M has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong primary indicators, Bats Series is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Blackrock Secured Credit

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Blackrock Secured Credit has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Blackrock Secured is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Bats Series and Blackrock Secured

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

The idea behind Bats Series M and Blackrock Secured Credit 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.