Correlation Between BlackRock ESG and HAL Trust

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

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

Diversification Opportunities for BlackRock ESG and HAL Trust

-0.72

Correlation Coefficient

BlackRock ESG  HAL Trust

Pay attention - limited upside

The 3 months correlation between BlackRock and HAL is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding BlackRock ESG Multi Asset and HAL Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HAL Trust and BlackRock ESG 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 ESG Multi Asset are associated (or correlated) with HAL Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HAL Trust has no effect on the direction of BlackRock ESG i.e., BlackRock ESG and HAL Trust go up and down completely randomly.

Pair Corralation between BlackRock ESG and HAL Trust

Assuming the 90 days trading horizon BlackRock ESG Multi Asset is expected to generate 0.61 times more return on investment than HAL Trust. However, BlackRock ESG Multi Asset is 1.65 times less risky than HAL Trust. It trades about 0.25 of its potential returns per unit of risk. HAL Trust is currently generating about -0.1 per unit of risk. If you would invest  570.00  in BlackRock ESG Multi Asset on September 2, 2024 and sell it today you would earn a total of  44.00  from holding BlackRock ESG Multi Asset or generate 7.72% return on investment over 90 days.

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

BlackRock ESG Multi Asset  vs.  HAL Trust

BlackRock ESG Multi

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in BlackRock ESG Multi Asset are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, BlackRock ESG may actually be approaching a critical reversion point that can send shares even higher in January 2025.

HAL Trust

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days HAL Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable essential indicators, HAL Trust is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with BlackRock ESG and HAL Trust

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

The idea behind BlackRock ESG Multi Asset and HAL Trust 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.