Correlation Between Blackrock Intl and Causeway Emerging
Can any of the company-specific risk be diversified away by investing in both Blackrock Intl and Causeway Emerging 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 Intl and Causeway Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Blackrock Intl A and Causeway Emerging Markets, you can compare the effects of market volatilities on Blackrock Intl and Causeway Emerging 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 Intl with a short position of Causeway Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackrock Intl and Causeway Emerging.
Diversification Opportunities for Blackrock Intl and Causeway Emerging
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Blackrock and Causeway is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Blackrock Intl A and Causeway Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Causeway Emerging Markets and Blackrock Intl 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 Intl A are associated (or correlated) with Causeway Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Causeway Emerging Markets has no effect on the direction of Blackrock Intl i.e., Blackrock Intl and Causeway Emerging go up and down completely randomly.
Pair Corralation between Blackrock Intl and Causeway Emerging
Assuming the 90 days horizon Blackrock Intl A is expected to under-perform the Causeway Emerging. But the mutual fund apears to be less risky and, when comparing its historical volatility, Blackrock Intl A is 1.18 times less risky than Causeway Emerging. The mutual fund trades about -0.01 of its potential returns per unit of risk. The Causeway Emerging Markets is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 1,132 in Causeway Emerging Markets on May 5, 2025 and sell it today you would earn a total of 131.00 from holding Causeway Emerging Markets or generate 11.57% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Blackrock Intl A vs. Causeway Emerging Markets
Performance |
Timeline |
Blackrock Intl A |
Causeway Emerging Markets |
Blackrock Intl and Causeway Emerging Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Blackrock Intl and Causeway Emerging
The main advantage of trading using opposite Blackrock Intl and Causeway Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blackrock Intl position performs unexpectedly, Causeway Emerging 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 Causeway Emerging will offset losses from the drop in Causeway Emerging's long position.Blackrock Intl vs. Blackrock California Municipal | Blackrock Intl vs. Blackrock Balanced Capital | Blackrock Intl vs. Mkeax | Blackrock Intl vs. Blackrock Eurofund Class |
Causeway Emerging vs. Causeway Emerging Markets | Causeway Emerging vs. Causeway Global Value | Causeway Emerging vs. Causeway Global Value | Causeway Emerging vs. Causeway International Small |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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