Correlation Between Blackrock Financial and ProShares Short

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

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

Diversification Opportunities for Blackrock Financial and ProShares Short

-0.74

Correlation Coefficient

Blackrock Financial  ProShares Short

Pay attention - limited upside

The 3 months correlation between Blackrock and ProShares is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Blackrock Financial Institutio and ProShares Short Financials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Short Fina and Blackrock Financial 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 Financial Institutions are associated (or correlated) with ProShares Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares Short Fina has no effect on the direction of Blackrock Financial i.e., Blackrock Financial and ProShares Short go up and down completely randomly.

Pair Corralation between Blackrock Financial and ProShares Short

Assuming the 90 days horizon Blackrock Financial Institutions is expected to generate 0.3 times more return on investment than ProShares Short. However, Blackrock Financial Institutions is 3.29 times less risky than ProShares Short. It trades about 0.0 of its potential returns per unit of risk. ProShares Short Financials is currently generating about -0.02 per unit of risk. If you would invest  100.00  in Blackrock Financial Institutions on January 26, 2024 and sell it today you would earn a total of  0.00  from holding Blackrock Financial Institutions or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	63.84%
Values	Daily Returns

Blackrock Financial Institutio  vs.  ProShares Short Financials

Blackrock Financial

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Blackrock Financial Institutions are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Blackrock Financial is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

ProShares Short Fina

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ProShares Short Financials has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, ProShares Short is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Blackrock Financial and ProShares Short

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

The idea behind Blackrock Financial Institutions and ProShares Short Financials 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 Commodity Directory module to find actively traded commodities issued by global exchanges.