Correlation Between Blackrock Debt and Booking Holdings
Can any of the company-specific risk be diversified away by investing in both Blackrock Debt and Booking Holdings 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 Booking Holdings 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 Booking Holdings, you can compare the effects of market volatilities on Blackrock Debt and Booking Holdings 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 Booking Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackrock Debt and Booking Holdings.
Diversification Opportunities for Blackrock Debt and Booking Holdings
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Blackrock and Booking is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Blackrock Debt Strategies and Booking Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Booking Holdings 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 Booking Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Booking Holdings has no effect on the direction of Blackrock Debt i.e., Blackrock Debt and Booking Holdings go up and down completely randomly.
Pair Corralation between Blackrock Debt and Booking Holdings
Considering the 90-day investment horizon Blackrock Debt Strategies is expected to generate 0.71 times more return on investment than Booking Holdings. However, Blackrock Debt Strategies is 1.41 times less risky than Booking Holdings. It trades about -0.18 of its potential returns per unit of risk. Booking Holdings is currently generating about -0.13 per unit of risk. If you would invest 1,109 in Blackrock Debt Strategies on January 26, 2024 and sell it today you would lose (42.00) from holding Blackrock Debt Strategies or give up 3.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Blackrock Debt Strategies vs. Booking Holdings
Performance |
| Timeline |
| Blackrock Debt Strategies |
| Booking Holdings |
Blackrock Debt and Booking Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Blackrock Debt and Booking Holdings
The main advantage of trading using opposite Blackrock Debt and Booking Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blackrock Debt position performs unexpectedly, Booking Holdings 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 Booking Holdings will offset losses from the drop in Booking Holdings' long position.The idea behind Blackrock Debt Strategies and Booking Holdings 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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