Correlation Between Cliffwater Corporate and Blackrock Gbl

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

By analyzing existing cross correlation between Cliffwater Corporate Lending and Blackrock Gbl Alloc, you can compare the effects of market volatilities on Cliffwater Corporate and Blackrock Gbl 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 Cliffwater Corporate with a short position of Blackrock Gbl. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cliffwater Corporate and Blackrock Gbl.

Diversification Opportunities for Cliffwater Corporate and Blackrock Gbl

0.35

Correlation Coefficient

Cliffwater Corporate  Blackrock Gbl

Weak diversification

The 3 months correlation between Cliffwater and Blackrock is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Cliffwater Corporate Lending and Blackrock Gbl Alloc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Gbl Alloc and Cliffwater Corporate 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 Cliffwater Corporate Lending are associated (or correlated) with Blackrock Gbl. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock Gbl Alloc has no effect on the direction of Cliffwater Corporate i.e., Cliffwater Corporate and Blackrock Gbl go up and down completely randomly.

Pair Corralation between Cliffwater Corporate and Blackrock Gbl

Assuming the 90 days horizon Cliffwater Corporate Lending is expected to generate 0.1 times more return on investment than Blackrock Gbl. However, Cliffwater Corporate Lending is 10.23 times less risky than Blackrock Gbl. It trades about 0.78 of its potential returns per unit of risk. Blackrock Gbl Alloc is currently generating about -0.04 per unit of risk. If you would invest  1,062  in Cliffwater Corporate Lending on September 21, 2024 and sell it today you would earn a total of  26.00  from holding Cliffwater Corporate Lending or generate 2.45% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Cliffwater Corporate Lending  vs.  Blackrock Gbl Alloc

Cliffwater Corporate

Risk-Adjusted Performance

61 of 100

Market Crasher

Compared to the overall equity markets, risk-adjusted returns on investments in Cliffwater Corporate Lending are ranked lower than 61 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Cliffwater Corporate is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Blackrock Gbl Alloc

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Cliffwater Corporate and Blackrock Gbl

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

The idea behind Cliffwater Corporate Lending and Blackrock Gbl Alloc 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.