Correlation Between BlackRock Credit and BlackRock Utility

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

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

Diversification Opportunities for BlackRock Credit and BlackRock Utility

0.97

Correlation Coefficient

BlackRock Credit  BlackRock Utility

Almost no diversification

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

Pair Corralation between BlackRock Credit and BlackRock Utility

Considering the 90-day investment horizon BlackRock Credit is expected to generate 1.89 times less return on investment than BlackRock Utility. But when comparing it to its historical volatility, BlackRock Credit Allocation is 1.72 times less risky than BlackRock Utility. It trades about 0.28 of its potential returns per unit of risk. BlackRock Utility Infrastructure is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest  2,341  in BlackRock Utility Infrastructure on May 7, 2025 and sell it today you would earn a total of  311.00  from holding BlackRock Utility Infrastructure or generate 13.28% return on investment over 90 days.

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

BlackRock Credit Allocation  vs.  BlackRock Utility Infrastructu

BlackRock Credit All

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in BlackRock Credit Allocation are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, BlackRock Credit may actually be approaching a critical reversion point that can send shares even higher in September 2025.

BlackRock Utility

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in BlackRock Utility Infrastructure are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. Despite fairly conflicting basic indicators, BlackRock Utility demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BlackRock Credit and BlackRock Utility

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

The idea behind BlackRock Credit Allocation and BlackRock Utility Infrastructure 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.