Correlation Between Highland Floating and BlackRock Science

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

By analyzing existing cross correlation between Highland Floating Rate and BlackRock Science Tech, you can compare the effects of market volatilities on Highland Floating and BlackRock Science 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 Highland Floating with a short position of BlackRock Science. Check out your portfolio center. Please also check ongoing floating volatility patterns of Highland Floating and BlackRock Science.

Diversification Opportunities for Highland Floating and BlackRock Science

-0.5

Correlation Coefficient

Highland Floating  BlackRock Science

Very good diversification

The 3 months correlation between Highland and BlackRock is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Highland Floating Rate and BlackRock Science Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BlackRock Science Tech and Highland Floating 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 Highland Floating Rate are associated (or correlated) with BlackRock Science. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BlackRock Science Tech has no effect on the direction of Highland Floating i.e., Highland Floating and BlackRock Science go up and down completely randomly.

Pair Corralation between Highland Floating and BlackRock Science

Given the investment horizon of 90 days Highland Floating Rate is expected to under-perform the BlackRock Science. But the fund apears to be less risky and, when comparing its historical volatility, Highland Floating Rate is 1.01 times less risky than BlackRock Science. The fund trades about -0.45 of its potential returns per unit of risk. The BlackRock Science Tech is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  3,644  in BlackRock Science Tech on September 24, 2024 and sell it today you would earn a total of  35.00  from holding BlackRock Science Tech or generate 0.96% return on investment over 90 days.

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

Highland Floating Rate  vs.  BlackRock Science Tech

Highland Floating Rate

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Highland Floating Rate has generated negative risk-adjusted returns adding no value to fund investors. In spite of uncertain performance in the last few months, the Fund's basic indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the fund investors.

BlackRock Science Tech

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in BlackRock Science Tech are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, BlackRock Science may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Highland Floating and BlackRock Science

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

The idea behind Highland Floating Rate and BlackRock Science Tech 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.