Correlation Between Bondbloxx ETF and Community Heritage

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

By analyzing existing cross correlation between Bondbloxx ETF Trust and Community Heritage Financial, you can compare the effects of market volatilities on Bondbloxx ETF and Community Heritage 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 Bondbloxx ETF with a short position of Community Heritage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bondbloxx ETF and Community Heritage.

Diversification Opportunities for Bondbloxx ETF and Community Heritage

-0.24

Correlation Coefficient

Bondbloxx ETF  Community Heritage

Very good diversification

The 3 months correlation between Bondbloxx and Community is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Bondbloxx ETF Trust and Community Heritage Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Community Heritage and Bondbloxx ETF 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 Bondbloxx ETF Trust are associated (or correlated) with Community Heritage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Community Heritage has no effect on the direction of Bondbloxx ETF i.e., Bondbloxx ETF and Community Heritage go up and down completely randomly.

Pair Corralation between Bondbloxx ETF and Community Heritage

Given the investment horizon of 90 days Bondbloxx ETF is expected to generate 9.39 times less return on investment than Community Heritage. But when comparing it to its historical volatility, Bondbloxx ETF Trust is 12.52 times less risky than Community Heritage. It trades about 0.15 of its potential returns per unit of risk. Community Heritage Financial is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  1,600  in Community Heritage Financial on September 12, 2024 and sell it today you would earn a total of  700.00  from holding Community Heritage Financial or generate 43.75% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	62.78%
Values	Daily Returns

Bondbloxx ETF Trust  vs.  Community Heritage Financial

Bondbloxx ETF Trust

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bondbloxx ETF Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Bondbloxx ETF is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Community Heritage

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Community Heritage Financial are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical indicators, Community Heritage may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Bondbloxx ETF and Community Heritage

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

The idea behind Bondbloxx ETF Trust and Community Heritage Financial 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.

Check out your portfolio center.

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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.