Correlation Between BlackRock ESG and Midcap Fund

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

By analyzing existing cross correlation between BlackRock ESG Capital and Midcap Fund Class, you can compare the effects of market volatilities on BlackRock ESG and Midcap Fund 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 ESG with a short position of Midcap Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of BlackRock ESG and Midcap Fund.

Diversification Opportunities for BlackRock ESG and Midcap Fund

0.9

Correlation Coefficient

BlackRock ESG  Midcap Fund

Almost no diversification

The 3 months correlation between BlackRock and Midcap is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding BlackRock ESG Capital and Midcap Fund Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Midcap Fund Class and BlackRock ESG 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 ESG Capital are associated (or correlated) with Midcap Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Midcap Fund Class has no effect on the direction of BlackRock ESG i.e., BlackRock ESG and Midcap Fund go up and down completely randomly.

Pair Corralation between BlackRock ESG and Midcap Fund

Given the investment horizon of 90 days BlackRock ESG Capital is expected to generate 0.87 times more return on investment than Midcap Fund. However, BlackRock ESG Capital is 1.15 times less risky than Midcap Fund. It trades about 0.21 of its potential returns per unit of risk. Midcap Fund Class is currently generating about 0.08 per unit of risk. If you would invest  1,488  in BlackRock ESG Capital on May 5, 2025 and sell it today you would earn a total of  137.00  from holding BlackRock ESG Capital or generate 9.21% return on investment over 90 days.

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

BlackRock ESG Capital  vs.  Midcap Fund Class

BlackRock ESG Capital

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in BlackRock ESG Capital are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, BlackRock ESG may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Midcap Fund Class

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Midcap Fund Class are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Midcap Fund 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 ESG and Midcap Fund

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

The idea behind BlackRock ESG Capital and Midcap Fund Class 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.