Correlation Between BlackRock Energy and Blackrock Muni
Can any of the company-specific risk be diversified away by investing in both BlackRock Energy and Blackrock Muni 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 Energy and Blackrock Muni into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BlackRock Energy and and Blackrock Muni Intermediate, you can compare the effects of market volatilities on BlackRock Energy and Blackrock Muni 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 Energy with a short position of Blackrock Muni. Check out your portfolio center. Please also check ongoing floating volatility patterns of BlackRock Energy and Blackrock Muni.
Diversification Opportunities for BlackRock Energy and Blackrock Muni
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between BlackRock and Blackrock is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding BlackRock Energy and and Blackrock Muni Intermediate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Muni Inter and BlackRock Energy 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 Energy and are associated (or correlated) with Blackrock Muni. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock Muni Inter has no effect on the direction of BlackRock Energy i.e., BlackRock Energy and Blackrock Muni go up and down completely randomly.
Pair Corralation between BlackRock Energy and Blackrock Muni
Considering the 90-day investment horizon BlackRock Energy and is expected to generate 1.83 times more return on investment than Blackrock Muni. However, BlackRock Energy is 1.83 times more volatile than Blackrock Muni Intermediate. It trades about 0.12 of its potential returns per unit of risk. Blackrock Muni Intermediate is currently generating about 0.09 per unit of risk. If you would invest 1,272 in BlackRock Energy and on August 31, 2024 and sell it today you would earn a total of 97.00 from holding BlackRock Energy and or generate 7.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BlackRock Energy and vs. Blackrock Muni Intermediate
Performance |
| Timeline |
| BlackRock Energy |
| Blackrock Muni Inter |
BlackRock Energy and Blackrock Muni Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BlackRock Energy and Blackrock Muni
The main advantage of trading using opposite BlackRock Energy and Blackrock Muni positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BlackRock Energy position performs unexpectedly, Blackrock Muni 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 Muni will offset losses from the drop in Blackrock Muni's long position.| BlackRock Energy vs. Blackrock Enhanced Equity | BlackRock Energy vs. BlackRock Capital Allocation | BlackRock Energy vs. BlackRock Utility Infrastructure | BlackRock Energy vs. Blackrock Enhanced Capital |
| Blackrock Muni vs. Blackrock Muniyield | Blackrock Muni vs. Blackrock Muniyield Quality | Blackrock Muni vs. Blackrock Muniyield Quality | Blackrock Muni vs. Blackrock Muniholdings Quality |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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