Correlation Between BlackRock Capital and Tradr 2X

Can any of the company-specific risk be diversified away by investing in both BlackRock Capital and Tradr 2X 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 Tradr 2X 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 Tradr 2X Long, you can compare the effects of market volatilities on BlackRock Capital and Tradr 2X 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 Tradr 2X. Check out your portfolio center. Please also check ongoing floating volatility patterns of BlackRock Capital and Tradr 2X.

Diversification Opportunities for BlackRock Capital and Tradr 2X

0.14

Correlation Coefficient

BlackRock Capital  Tradr 2X

Average diversification

The 3 months correlation between BlackRock and Tradr is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding BlackRock Capital Allocation and Tradr 2X Long in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tradr 2X Long 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 Tradr 2X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tradr 2X Long has no effect on the direction of BlackRock Capital i.e., BlackRock Capital and Tradr 2X go up and down completely randomly.

Pair Corralation between BlackRock Capital and Tradr 2X

Given the investment horizon of 90 days BlackRock Capital is expected to generate 22.61 times less return on investment than Tradr 2X. But when comparing it to its historical volatility, BlackRock Capital Allocation is 23.16 times less risky than Tradr 2X. It trades about 0.18 of its potential returns per unit of risk. Tradr 2X Long is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  2,828  in Tradr 2X Long on May 7, 2025 and sell it today you would earn a total of  1,770  from holding Tradr 2X Long or generate 62.59% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	47.54%
Values	Daily Returns

BlackRock Capital Allocation  vs.  Tradr 2X Long

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.

Tradr 2X Long

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Tradr 2X Long are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Tradr 2X unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BlackRock Capital and Tradr 2X

The main advantage of trading using opposite BlackRock Capital and Tradr 2X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BlackRock Capital position performs unexpectedly, Tradr 2X 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 Tradr 2X will offset losses from the drop in Tradr 2X's long position.

The idea behind BlackRock Capital Allocation and Tradr 2X Long 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 Channel module to use Commodity Channel Index to analyze current equity momentum.