Correlation Between Blackrock Gbl and Oakhurst Short

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

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

Diversification Opportunities for Blackrock Gbl and Oakhurst Short

0.49

Correlation Coefficient

Blackrock Gbl  Oakhurst Short

Very weak diversification

The 3 months correlation between Blackrock and Oakhurst is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Blackrock Gbl Alloc and Oakhurst Short Duration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oakhurst Short Duration and Blackrock Gbl 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 Gbl Alloc are associated (or correlated) with Oakhurst Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oakhurst Short Duration has no effect on the direction of Blackrock Gbl i.e., Blackrock Gbl and Oakhurst Short go up and down completely randomly.

Pair Corralation between Blackrock Gbl and Oakhurst Short

Assuming the 90 days horizon Blackrock Gbl Alloc is expected to under-perform the Oakhurst Short. In addition to that, Blackrock Gbl is 4.56 times more volatile than Oakhurst Short Duration. It trades about -0.04 of its total potential returns per unit of risk. Oakhurst Short Duration is currently generating about -0.07 per unit of volatility. If you would invest  949.00  in Oakhurst Short Duration on September 21, 2024 and sell it today you would lose (5.00) from holding Oakhurst Short Duration or give up 0.53% of portfolio value over 90 days.

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

Blackrock Gbl Alloc  vs.  Oakhurst Short Duration

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.

Oakhurst Short Duration

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Blackrock Gbl and Oakhurst Short

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

The idea behind Blackrock Gbl Alloc and Oakhurst Short Duration 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.