Correlation Between BlackRock Floating and Blackrock Muni
Can any of the company-specific risk be diversified away by investing in both BlackRock Floating 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 Floating 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 Floating Rate and Blackrock Muni Intermediate, you can compare the effects of market volatilities on BlackRock Floating 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 Floating with a short position of Blackrock Muni. Check out your portfolio center. Please also check ongoing floating volatility patterns of BlackRock Floating and Blackrock Muni.
Diversification Opportunities for BlackRock Floating and Blackrock Muni
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between BlackRock and Blackrock is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding BlackRock Floating Rate 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 Floating 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 Floating Rate 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 Floating i.e., BlackRock Floating and Blackrock Muni go up and down completely randomly.
Pair Corralation between BlackRock Floating and Blackrock Muni
Considering the 90-day investment horizon BlackRock Floating Rate is expected to generate 1.27 times more return on investment than Blackrock Muni. However, BlackRock Floating is 1.27 times more volatile than Blackrock Muni Intermediate. It trades about 0.1 of its potential returns per unit of risk. Blackrock Muni Intermediate is currently generating about 0.06 per unit of risk. If you would invest 907.00 in BlackRock Floating Rate on August 28, 2024 and sell it today you would earn a total of 392.00 from holding BlackRock Floating Rate or generate 43.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BlackRock Floating Rate vs. Blackrock Muni Intermediate
Performance |
| Timeline |
| BlackRock Floating Rate |
| Blackrock Muni Inter |
BlackRock Floating and Blackrock Muni Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BlackRock Floating and Blackrock Muni
The main advantage of trading using opposite BlackRock Floating and Blackrock Muni positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BlackRock Floating 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 Floating vs. MFS Investment Grade | BlackRock Floating vs. Invesco High Income | BlackRock Floating vs. Eaton Vance National | BlackRock Floating vs. Nuveen California Select |
| 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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