Correlation Between Litigation Capital and BlackRock Investment
Can any of the company-specific risk be diversified away by investing in both Litigation Capital and BlackRock Investment 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 Litigation Capital and BlackRock Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Litigation Capital Management and BlackRock Investment Quality, you can compare the effects of market volatilities on Litigation Capital and BlackRock Investment 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 Litigation Capital with a short position of BlackRock Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Litigation Capital and BlackRock Investment.
Diversification Opportunities for Litigation Capital and BlackRock Investment
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Litigation and BlackRock is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Litigation Capital Management and BlackRock Investment Quality in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BlackRock Investment and Litigation Capital 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 Litigation Capital Management are associated (or correlated) with BlackRock Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BlackRock Investment has no effect on the direction of Litigation Capital i.e., Litigation Capital and BlackRock Investment go up and down completely randomly.
Pair Corralation between Litigation Capital and BlackRock Investment
Assuming the 90 days trading horizon Litigation Capital Management is expected to under-perform the BlackRock Investment. In addition to that, Litigation Capital is 18.12 times more volatile than BlackRock Investment Quality. It trades about -0.17 of its total potential returns per unit of risk. BlackRock Investment Quality is currently generating about 0.18 per unit of volatility. If you would invest 1,070 in BlackRock Investment Quality on August 14, 2025 and sell it today you would earn a total of 63.00 from holding BlackRock Investment Quality or generate 5.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Litigation Capital Management vs. BlackRock Investment Quality
Performance |
| Timeline |
| Litigation Capital |
| BlackRock Investment |
Litigation Capital and BlackRock Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Litigation Capital and BlackRock Investment
The main advantage of trading using opposite Litigation Capital and BlackRock Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Litigation Capital position performs unexpectedly, BlackRock Investment 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 Investment will offset losses from the drop in BlackRock Investment's long position.| Litigation Capital vs. Uniper SE | Litigation Capital vs. London Security Plc | Litigation Capital vs. Amicorp FS PLC | Litigation Capital vs. Christian Dior SE |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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