Correlation Between High-yield Municipal and BlackRock High
Can any of the company-specific risk be diversified away by investing in both High-yield Municipal and BlackRock High 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 High-yield Municipal and BlackRock High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between High Yield Municipal Fund and BlackRock High Yield, you can compare the effects of market volatilities on High-yield Municipal and BlackRock High 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 High-yield Municipal with a short position of BlackRock High. Check out your portfolio center. Please also check ongoing floating volatility patterns of High-yield Municipal and BlackRock High.
Diversification Opportunities for High-yield Municipal and BlackRock High
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between High-yield and BlackRock is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding High Yield Municipal Fund and BlackRock High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BlackRock High Yield and High-yield Municipal 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 High Yield Municipal Fund are associated (or correlated) with BlackRock High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BlackRock High Yield has no effect on the direction of High-yield Municipal i.e., High-yield Municipal and BlackRock High go up and down completely randomly.
Pair Corralation between High-yield Municipal and BlackRock High
Assuming the 90 days horizon High-yield Municipal is expected to generate 1.55 times less return on investment than BlackRock High. But when comparing it to its historical volatility, High Yield Municipal Fund is 1.41 times less risky than BlackRock High. It trades about 0.08 of its potential returns per unit of risk. BlackRock High Yield is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,971 in BlackRock High Yield on September 2, 2024 and sell it today you would earn a total of 349.00 from holding BlackRock High Yield or generate 17.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
High Yield Municipal Fund vs. BlackRock High Yield
Performance |
| Timeline |
| High Yield Municipal |
| BlackRock High Yield |
High-yield Municipal and BlackRock High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with High-yield Municipal and BlackRock High
The main advantage of trading using opposite High-yield Municipal and BlackRock High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if High-yield Municipal position performs unexpectedly, BlackRock High 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 High will offset losses from the drop in BlackRock High's long position.| High-yield Municipal vs. High Yield Fund Investor | High-yield Municipal vs. Intermediate Term Tax Free Bond | High-yield Municipal vs. California High Yield Municipal | High-yield Municipal vs. T Rowe Price |
| BlackRock High vs. BlackRock Intermediate Muni | BlackRock High vs. VanEck Short High | BlackRock High vs. iShares iBonds Dec | BlackRock High vs. SPDR Nuveen Bloomberg |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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