Correlation Between Floating Rate and Blackrock Floating

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

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

Diversification Opportunities for Floating Rate and Blackrock Floating

0.99

Correlation Coefficient

Floating Rate  Blackrock Floating

No risk reduction

The 3 months correlation between Floating and Blackrock is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Floating Rate Fund and Blackrock Floating Rate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Floating Rate and Floating Rate 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 Floating Rate Fund are associated (or correlated) with Blackrock Floating. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock Floating Rate has no effect on the direction of Floating Rate i.e., Floating Rate and Blackrock Floating go up and down completely randomly.

Pair Corralation between Floating Rate and Blackrock Floating

Assuming the 90 days horizon Floating Rate is expected to generate 1.04 times less return on investment than Blackrock Floating. In addition to that, Floating Rate is 1.07 times more volatile than Blackrock Floating Rate. It trades about 0.21 of its total potential returns per unit of risk. Blackrock Floating Rate is currently generating about 0.23 per unit of volatility. If you would invest  954.00  in Blackrock Floating Rate on September 2, 2024 and sell it today you would earn a total of  16.00  from holding Blackrock Floating Rate or generate 1.68% return on investment over 90 days.

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

Floating Rate Fund  vs.  Blackrock Floating Rate

Floating Rate

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Floating Rate Fund are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Floating Rate is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Blackrock Floating Rate

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Blackrock Floating Rate are ranked lower than 18 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Blackrock Floating is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Floating Rate and Blackrock Floating

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

The idea behind Floating Rate Fund and Blackrock Floating Rate 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.