Correlation Between Blackrock Debt and China Construction
Can any of the company-specific risk be diversified away by investing in both Blackrock Debt and China Construction 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 Debt and China Construction into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Blackrock Debt Strategies and China Construction Bank, you can compare the effects of market volatilities on Blackrock Debt and China Construction 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 Debt with a short position of China Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackrock Debt and China Construction.
Diversification Opportunities for Blackrock Debt and China Construction
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Blackrock and China is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Blackrock Debt Strategies and China Construction Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Construction Bank and Blackrock Debt 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 Debt Strategies are associated (or correlated) with China Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Construction Bank has no effect on the direction of Blackrock Debt i.e., Blackrock Debt and China Construction go up and down completely randomly.
Pair Corralation between Blackrock Debt and China Construction
Considering the 90-day investment horizon Blackrock Debt is expected to generate 16.16 times less return on investment than China Construction. But when comparing it to its historical volatility, Blackrock Debt Strategies is 3.16 times less risky than China Construction. It trades about 0.02 of its potential returns per unit of risk. China Construction Bank is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 56.00 in China Construction Bank on January 24, 2024 and sell it today you would earn a total of 7.00 from holding China Construction Bank or generate 12.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Blackrock Debt Strategies vs. China Construction Bank
Performance |
| Timeline |
| Blackrock Debt Strategies |
| China Construction Bank |
Blackrock Debt and China Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Blackrock Debt and China Construction
The main advantage of trading using opposite Blackrock Debt and China Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blackrock Debt position performs unexpectedly, China Construction 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 China Construction will offset losses from the drop in China Construction's long position.| Blackrock Debt vs. First Trust Senior | Blackrock Debt vs. BlackRock Floating Rate | Blackrock Debt vs. Eaton Vance Senior | Blackrock Debt vs. First TrustAberdeen Global |
| China Construction vs. ANZ Group Holdings | China Construction vs. Bank of America | China Construction vs. Bank of America | China Construction vs. Wells Fargo |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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