Correlation Between BlackRock Capital and Advanced Micro

Can any of the company-specific risk be diversified away by investing in both BlackRock Capital and Advanced Micro 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 Capital and Advanced Micro into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between BlackRock Capital Allocation and Advanced Micro Devices, you can compare the effects of market volatilities on BlackRock Capital and Advanced Micro 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 Capital with a short position of Advanced Micro. Check out your portfolio center. Please also check ongoing floating volatility patterns of BlackRock Capital and Advanced Micro.

Diversification Opportunities for BlackRock Capital and Advanced Micro

0.86

Correlation Coefficient

BlackRock Capital  Advanced Micro

Very poor diversification

The 3 months correlation between BlackRock and Advanced is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding BlackRock Capital Allocation and Advanced Micro Devices in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advanced Micro Devices and BlackRock Capital 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 Capital Allocation are associated (or correlated) with Advanced Micro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advanced Micro Devices has no effect on the direction of BlackRock Capital i.e., BlackRock Capital and Advanced Micro go up and down completely randomly.

Pair Corralation between BlackRock Capital and Advanced Micro

Given the investment horizon of 90 days BlackRock Capital is expected to generate 8.75 times less return on investment than Advanced Micro. But when comparing it to its historical volatility, BlackRock Capital Allocation is 4.03 times less risky than Advanced Micro. It trades about 0.15 of its potential returns per unit of risk. Advanced Micro Devices is currently generating about 0.34 of returns per unit of risk over similar time horizon. If you would invest  1,886  in Advanced Micro Devices on May 5, 2025 and sell it today you would earn a total of  1,309  from holding Advanced Micro Devices or generate 69.41% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.44%
Values	Daily Returns

BlackRock Capital Allocation  vs.  Advanced Micro Devices

BlackRock Capital

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in BlackRock Capital Allocation are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, BlackRock Capital is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Advanced Micro Devices

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Advanced Micro Devices are ranked lower than 26 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Advanced Micro displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BlackRock Capital and Advanced Micro

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

The idea behind BlackRock Capital Allocation and Advanced Micro Devices 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.