Correlation Between Blackrock Science and First Trust

Can any of the company-specific risk be diversified away by investing in both Blackrock Science and First Trust 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 Science and First Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Blackrock Science Technology and First Trust Multi Strategy, you can compare the effects of market volatilities on Blackrock Science and First Trust 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 Science with a short position of First Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackrock Science and First Trust.

Diversification Opportunities for Blackrock Science and First Trust

0.93

Correlation Coefficient

Blackrock Science  First Trust

Almost no diversification

The 3 months correlation between Blackrock and First is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Blackrock Science Technology and First Trust Multi Strategy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust Multi and Blackrock Science 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 Science Technology are associated (or correlated) with First Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Trust Multi has no effect on the direction of Blackrock Science i.e., Blackrock Science and First Trust go up and down completely randomly.

Pair Corralation between Blackrock Science and First Trust

Assuming the 90 days horizon Blackrock Science Technology is expected to generate 8.47 times more return on investment than First Trust. However, Blackrock Science is 8.47 times more volatile than First Trust Multi Strategy. It trades about 0.19 of its potential returns per unit of risk. First Trust Multi Strategy is currently generating about 0.3 per unit of risk. If you would invest  6,272  in Blackrock Science Technology on May 3, 2025 and sell it today you would earn a total of  900.00  from holding Blackrock Science Technology or generate 14.35% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	98.39%
Values	Daily Returns

Blackrock Science Technology  vs.  First Trust Multi Strategy

Blackrock Science

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Blackrock Science Technology are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Blackrock Science showed solid returns over the last few months and may actually be approaching a breakup point.

First Trust Multi

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in First Trust Multi Strategy are ranked lower than 23 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, First Trust is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Blackrock Science and First Trust

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

The idea behind Blackrock Science Technology and First Trust Multi Strategy 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 Stocks Directory module to find actively traded stocks across global markets.