Correlation Between Inflation-adjusted and Blackrock Inflation
Can any of the company-specific risk be diversified away by investing in both Inflation-adjusted and Blackrock Inflation 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 Inflation-adjusted and Blackrock Inflation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Inflation Adjusted Bond Fund and Blackrock Inflation Protected, you can compare the effects of market volatilities on Inflation-adjusted and Blackrock Inflation 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 Inflation-adjusted with a short position of Blackrock Inflation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inflation-adjusted and Blackrock Inflation.
Diversification Opportunities for Inflation-adjusted and Blackrock Inflation
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Inflation-adjusted and Blackrock is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Inflation Adjusted Bond Fund and Blackrock Inflation Protected in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Inflation and Inflation-adjusted 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 Inflation Adjusted Bond Fund are associated (or correlated) with Blackrock Inflation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock Inflation has no effect on the direction of Inflation-adjusted i.e., Inflation-adjusted and Blackrock Inflation go up and down completely randomly.
Pair Corralation between Inflation-adjusted and Blackrock Inflation
Assuming the 90 days horizon Inflation-adjusted is expected to generate 1.09 times less return on investment than Blackrock Inflation. But when comparing it to its historical volatility, Inflation Adjusted Bond Fund is 1.13 times less risky than Blackrock Inflation. It trades about 0.09 of its potential returns per unit of risk. Blackrock Inflation Protected is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 980.00 in Blackrock Inflation Protected on August 25, 2025 and sell it today you would earn a total of 11.00 from holding Blackrock Inflation Protected or generate 1.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Inflation Adjusted Bond Fund vs. Blackrock Inflation Protected
Performance |
| Timeline |
| Inflation Adjusted Bond |
| Blackrock Inflation |
Inflation-adjusted and Blackrock Inflation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inflation-adjusted and Blackrock Inflation
The main advantage of trading using opposite Inflation-adjusted and Blackrock Inflation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inflation-adjusted position performs unexpectedly, Blackrock Inflation 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 Inflation will offset losses from the drop in Blackrock Inflation's long position.| Inflation-adjusted vs. Artisan High Income | Inflation-adjusted vs. Franklin High Yield | Inflation-adjusted vs. Transamerica High Yield | Inflation-adjusted vs. Aim Counselor Series |
| Blackrock Inflation vs. Fidelity Large Cap | Blackrock Inflation vs. Jhancock Disciplined Value | Blackrock Inflation vs. Guidemark Large Cap | Blackrock Inflation vs. Tax Managed Large Cap |
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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