Correlation Between BlackRock California and Federated Investors
Can any of the company-specific risk be diversified away by investing in both BlackRock California and Federated Investors 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 California and Federated Investors into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BlackRock California Municipal and Federated Investors B, you can compare the effects of market volatilities on BlackRock California and Federated Investors 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 California with a short position of Federated Investors. Check out your portfolio center. Please also check ongoing floating volatility patterns of BlackRock California and Federated Investors.
Diversification Opportunities for BlackRock California and Federated Investors
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between BlackRock and Federated is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding BlackRock California Municipal and Federated Investors B in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Investors and BlackRock California 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 California Municipal are associated (or correlated) with Federated Investors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Investors has no effect on the direction of BlackRock California i.e., BlackRock California and Federated Investors go up and down completely randomly.
Pair Corralation between BlackRock California and Federated Investors
Considering the 90-day investment horizon BlackRock California Municipal is expected to under-perform the Federated Investors. But the stock apears to be less risky and, when comparing its historical volatility, BlackRock California Municipal is 1.85 times less risky than Federated Investors. The stock trades about -0.01 of its potential returns per unit of risk. The Federated Investors B is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 4,220 in Federated Investors B on September 12, 2024 and sell it today you would earn a total of 13.00 from holding Federated Investors B or generate 0.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BlackRock California Municipal vs. Federated Investors B
Performance |
| Timeline |
| BlackRock California |
| Federated Investors |
BlackRock California and Federated Investors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BlackRock California and Federated Investors
The main advantage of trading using opposite BlackRock California and Federated Investors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BlackRock California position performs unexpectedly, Federated Investors 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 Federated Investors will offset losses from the drop in Federated Investors' long position.| BlackRock California vs. Blackrock Muniyield Quality | BlackRock California vs. Blackrock Muni Intermediate | BlackRock California vs. Nuveen California Amt | BlackRock California vs. Munivest Fund |
| Federated Investors vs. Federated Premier Municipal | Federated Investors vs. Blackrock Muniyield | Federated Investors vs. Diamond Hill Investment | Federated Investors vs. NXG NextGen Infrastructure |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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