Correlation Between Bondbloxx ETF and Techtronic Industries

Can any of the company-specific risk be diversified away by investing in both Bondbloxx ETF and Techtronic Industries 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 Techtronic Industries 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 Techtronic Industries, you can compare the effects of market volatilities on Bondbloxx ETF and Techtronic Industries 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 Techtronic Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bondbloxx ETF and Techtronic Industries.

Diversification Opportunities for Bondbloxx ETF and Techtronic Industries

-0.57

Correlation Coefficient

Bondbloxx ETF  Techtronic Industries

Excellent diversification

The 3 months correlation between Bondbloxx and Techtronic is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Bondbloxx ETF Trust and Techtronic Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Techtronic Industries 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 Techtronic Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Techtronic Industries has no effect on the direction of Bondbloxx ETF i.e., Bondbloxx ETF and Techtronic Industries go up and down completely randomly.

Pair Corralation between Bondbloxx ETF and Techtronic Industries

Given the investment horizon of 90 days Bondbloxx ETF Trust is expected to under-perform the Techtronic Industries. In addition to that, Bondbloxx ETF is 1.03 times more volatile than Techtronic Industries. It trades about -0.27 of its total potential returns per unit of risk. Techtronic Industries is currently generating about 0.08 per unit of volatility. If you would invest  1,295  in Techtronic Industries on January 25, 2024 and sell it today you would earn a total of  21.00  from holding Techtronic Industries or generate 1.62% return on investment over 90 days.

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

Bondbloxx ETF Trust  vs.  Techtronic Industries

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 fairly strong basic indicators, Bondbloxx ETF is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Techtronic Industries

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Techtronic Industries are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak fundamental indicators, Techtronic Industries reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bondbloxx ETF and Techtronic Industries

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

The idea behind Bondbloxx ETF Trust and Techtronic Industries 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.