Correlation Between BlackRock Latin and Leverage Shares

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

By analyzing existing cross correlation between BlackRock Latin American and Leverage Shares 3x, you can compare the effects of market volatilities on BlackRock Latin and Leverage Shares 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 Latin with a short position of Leverage Shares. Check out your portfolio center. Please also check ongoing floating volatility patterns of BlackRock Latin and Leverage Shares.

Diversification Opportunities for BlackRock Latin and Leverage Shares

0.8

Correlation Coefficient

BlackRock Latin  Leverage Shares

Very poor diversification

The 3 months correlation between BlackRock and Leverage is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding BlackRock Latin American and Leverage Shares 3x in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leverage Shares 3x and BlackRock Latin 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 Latin American are associated (or correlated) with Leverage Shares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leverage Shares 3x has no effect on the direction of BlackRock Latin i.e., BlackRock Latin and Leverage Shares go up and down completely randomly.

Pair Corralation between BlackRock Latin and Leverage Shares

Assuming the 90 days trading horizon BlackRock Latin American is expected to under-perform the Leverage Shares. But the etf apears to be less risky and, when comparing its historical volatility, BlackRock Latin American is 35.46 times less risky than Leverage Shares. The etf trades about 0.0 of its potential returns per unit of risk. The Leverage Shares 3x is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  10,091,800  in Leverage Shares 3x on September 14, 2024 and sell it today you would lose (10,091,685) from holding Leverage Shares 3x or give up 100.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	80.68%
Values	Daily Returns

BlackRock Latin American  vs.  Leverage Shares 3x

BlackRock Latin American

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BlackRock Latin American has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Etf's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the exchange-traded fund private investors.

Leverage Shares 3x

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Leverage Shares 3x has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Etf's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the exchange-traded fund private investors.

Pair Trading with BlackRock Latin and Leverage Shares

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

The idea behind BlackRock Latin American and Leverage Shares 3x 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.