Correlation Between Intermediate-term and Blackrock Focus

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

By analyzing existing cross correlation between Intermediate Term Tax Free Bond and Blackrock Focus Growth, you can compare the effects of market volatilities on Intermediate-term and Blackrock Focus 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 Intermediate-term with a short position of Blackrock Focus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intermediate-term and Blackrock Focus.

Diversification Opportunities for Intermediate-term and Blackrock Focus

-0.34

Correlation Coefficient

Intermediate-term  Blackrock Focus

Very good diversification

The 3 months correlation between Intermediate-term and Blackrock is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Intermediate Term Tax Free Bon and Blackrock Focus Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Focus Growth and Intermediate-term 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 Intermediate Term Tax Free Bond are associated (or correlated) with Blackrock Focus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock Focus Growth has no effect on the direction of Intermediate-term i.e., Intermediate-term and Blackrock Focus go up and down completely randomly.

Pair Corralation between Intermediate-term and Blackrock Focus

Assuming the 90 days horizon Intermediate-term is expected to generate 22.04 times less return on investment than Blackrock Focus. But when comparing it to its historical volatility, Intermediate Term Tax Free Bond is 5.51 times less risky than Blackrock Focus. It trades about 0.04 of its potential returns per unit of risk. Blackrock Focus Growth is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  701.00  in Blackrock Focus Growth on September 4, 2024 and sell it today you would earn a total of  74.00  from holding Blackrock Focus Growth or generate 10.56% return on investment over 90 days.

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

Intermediate Term Tax Free Bon  vs.  Blackrock Focus Growth

Intermediate Term Tax

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Intermediate Term Tax Free Bond are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Intermediate-term is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Blackrock Focus Growth

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Blackrock Focus Growth are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Blackrock Focus may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Intermediate-term and Blackrock Focus

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

The idea behind Intermediate Term Tax Free Bond and Blackrock Focus Growth 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..