Correlation Between BlackRock Capital and Vanguard Mid

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

Diversification Opportunities for BlackRock Capital and Vanguard Mid

0.97

Correlation Coefficient

BlackRock Capital  Vanguard Mid

Almost no diversification

The 3 months correlation between BlackRock and Vanguard is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding BlackRock Capital Allocation and Vanguard Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Mid Cap 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 Vanguard Mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Mid Cap has no effect on the direction of BlackRock Capital i.e., BlackRock Capital and Vanguard Mid go up and down completely randomly.

Pair Corralation between BlackRock Capital and Vanguard Mid

Given the investment horizon of 90 days BlackRock Capital is expected to generate 2.13 times less return on investment than Vanguard Mid. But when comparing it to its historical volatility, BlackRock Capital Allocation is 1.64 times less risky than Vanguard Mid. It trades about 0.18 of its potential returns per unit of risk. Vanguard Mid Cap is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest  2,512  in Vanguard Mid Cap on May 7, 2025 and sell it today you would earn a total of  393.00  from holding Vanguard Mid Cap or generate 15.64% return on investment over 90 days.

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

BlackRock Capital Allocation  vs.  Vanguard Mid Cap

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.

Vanguard Mid Cap

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Vanguard Mid Cap are ranked lower than 18 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Vanguard Mid showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BlackRock Capital and Vanguard Mid

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

The idea behind BlackRock Capital Allocation and Vanguard Mid Cap 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.

Check out your portfolio center.

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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.