Correlation Between Aberdeen Standard and Blackrock Muniyield
Can any of the company-specific risk be diversified away by investing in both Aberdeen Standard and Blackrock Muniyield 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 Aberdeen Standard and Blackrock Muniyield into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aberdeen Standard Global and Blackrock Muniyield Quality, you can compare the effects of market volatilities on Aberdeen Standard and Blackrock Muniyield 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 Aberdeen Standard with a short position of Blackrock Muniyield. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aberdeen Standard and Blackrock Muniyield.
Diversification Opportunities for Aberdeen Standard and Blackrock Muniyield
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Aberdeen and Blackrock is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Aberdeen Standard Global and Blackrock Muniyield Quality in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Muniyield and Aberdeen Standard 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 Aberdeen Standard Global are associated (or correlated) with Blackrock Muniyield. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock Muniyield has no effect on the direction of Aberdeen Standard i.e., Aberdeen Standard and Blackrock Muniyield go up and down completely randomly.
Pair Corralation between Aberdeen Standard and Blackrock Muniyield
Given the investment horizon of 90 days Aberdeen Standard Global is expected to generate 1.29 times more return on investment than Blackrock Muniyield. However, Aberdeen Standard is 1.29 times more volatile than Blackrock Muniyield Quality. It trades about 0.07 of its potential returns per unit of risk. Blackrock Muniyield Quality is currently generating about 0.05 per unit of risk. If you would invest 1,464 in Aberdeen Standard Global on August 28, 2024 and sell it today you would earn a total of 501.00 from holding Aberdeen Standard Global or generate 34.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aberdeen Standard Global vs. Blackrock Muniyield Quality
Performance |
| Timeline |
| Aberdeen Standard Global |
| Blackrock Muniyield |
Aberdeen Standard and Blackrock Muniyield Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aberdeen Standard and Blackrock Muniyield
The main advantage of trading using opposite Aberdeen Standard and Blackrock Muniyield positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aberdeen Standard position performs unexpectedly, Blackrock Muniyield 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 Muniyield will offset losses from the drop in Blackrock Muniyield's long position.| Aberdeen Standard vs. Blackrock Muniyield Quality | Aberdeen Standard vs. PIMCO Access Income | Aberdeen Standard vs. Nuveen Municipal Credit | Aberdeen Standard vs. Western Asset Diversified |
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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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