Correlation Between BlackRock Capital and Invesco DB

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

Diversification Opportunities for BlackRock Capital and Invesco DB

0.61

Correlation Coefficient

BlackRock Capital  Invesco DB

Poor diversification

The 3 months correlation between BlackRock and Invesco is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding BlackRock Capital Allocation and Invesco DB Precious in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco DB Precious 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 Invesco DB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco DB Precious has no effect on the direction of BlackRock Capital i.e., BlackRock Capital and Invesco DB go up and down completely randomly.

Pair Corralation between BlackRock Capital and Invesco DB

Given the investment horizon of 90 days BlackRock Capital Allocation is expected to generate 0.57 times more return on investment than Invesco DB. However, BlackRock Capital Allocation is 1.74 times less risky than Invesco DB. It trades about 0.18 of its potential returns per unit of risk. Invesco DB Precious is currently generating about 0.04 per unit of risk. If you would invest  1,394  in BlackRock Capital Allocation on May 7, 2025 and sell it today you would earn a total of  99.00  from holding BlackRock Capital Allocation or generate 7.1% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

BlackRock Capital Allocation  vs.  Invesco DB Precious

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 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, BlackRock Capital may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Invesco DB Precious

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Invesco DB Precious are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable fundamental drivers, Invesco DB is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with BlackRock Capital and Invesco DB

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

The idea behind BlackRock Capital Allocation and Invesco DB Precious 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.