Correlation Between BlackRock Municipal and Blackrock Muniholdings
Can any of the company-specific risk be diversified away by investing in both BlackRock Municipal and Blackrock Muniholdings 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 Municipal and Blackrock Muniholdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BlackRock Municipal Income and Blackrock Muniholdings Closed, you can compare the effects of market volatilities on BlackRock Municipal and Blackrock Muniholdings 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 Municipal with a short position of Blackrock Muniholdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of BlackRock Municipal and Blackrock Muniholdings.
Diversification Opportunities for BlackRock Municipal and Blackrock Muniholdings
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between BlackRock and Blackrock is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding BlackRock Municipal Income and Blackrock Muniholdings Closed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Muniholdings and BlackRock 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 BlackRock Municipal Income are associated (or correlated) with Blackrock Muniholdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock Muniholdings has no effect on the direction of BlackRock Municipal i.e., BlackRock Municipal and Blackrock Muniholdings go up and down completely randomly.
Pair Corralation between BlackRock Municipal and Blackrock Muniholdings
Considering the 90-day investment horizon BlackRock Municipal Income is expected to generate 0.88 times more return on investment than Blackrock Muniholdings. However, BlackRock Municipal Income is 1.13 times less risky than Blackrock Muniholdings. It trades about 0.12 of its potential returns per unit of risk. Blackrock Muniholdings Closed is currently generating about 0.07 per unit of risk. If you would invest 1,013 in BlackRock Municipal Income on August 28, 2024 and sell it today you would earn a total of 14.00 from holding BlackRock Municipal Income or generate 1.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
BlackRock Municipal Income vs. Blackrock Muniholdings Closed
Performance |
| Timeline |
| BlackRock Municipal |
| Blackrock Muniholdings |
BlackRock Municipal and Blackrock Muniholdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BlackRock Municipal and Blackrock Muniholdings
The main advantage of trading using opposite BlackRock Municipal and Blackrock Muniholdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BlackRock Municipal position performs unexpectedly, Blackrock Muniholdings 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 Muniholdings will offset losses from the drop in Blackrock Muniholdings' long position.The idea behind BlackRock Municipal Income and Blackrock Muniholdings Closed pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
| Blackrock Muniholdings vs. DTF Tax Free | Blackrock Muniholdings vs. MFS High Yield | Blackrock Muniholdings vs. MFS High Income | Blackrock Muniholdings vs. John Hancock Income |
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 Stocks Directory module to find actively traded stocks across global markets.
Other Complementary Tools
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules |