Correlation Between Blackrock High and High-yield Municipal
Can any of the company-specific risk be diversified away by investing in both Blackrock High and High-yield Municipal 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 High and High-yield Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Blackrock High Yield and High Yield Municipal Fund, you can compare the effects of market volatilities on Blackrock High and High-yield Municipal 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 High with a short position of High-yield Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackrock High and High-yield Municipal.
Diversification Opportunities for Blackrock High and High-yield Municipal
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Blackrock and High-yield is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Blackrock High Yield and High Yield Municipal Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on High Yield Municipal and Blackrock High 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 High Yield are associated (or correlated) with High-yield Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of High Yield Municipal has no effect on the direction of Blackrock High i.e., Blackrock High and High-yield Municipal go up and down completely randomly.
Pair Corralation between Blackrock High and High-yield Municipal
Assuming the 90 days horizon Blackrock High Yield is expected to generate 0.78 times more return on investment than High-yield Municipal. However, Blackrock High Yield is 1.29 times less risky than High-yield Municipal. It trades about 0.22 of its potential returns per unit of risk. High Yield Municipal Fund is currently generating about 0.14 per unit of risk. If you would invest 677.00 in Blackrock High Yield on August 24, 2024 and sell it today you would earn a total of 40.00 from holding Blackrock High Yield or generate 5.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Blackrock High Yield vs. High Yield Municipal Fund
Performance |
| Timeline |
| Blackrock High Yield |
| High Yield Municipal |
Blackrock High and High-yield Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Blackrock High and High-yield Municipal
The main advantage of trading using opposite Blackrock High and High-yield Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blackrock High position performs unexpectedly, High-yield Municipal 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 High-yield Municipal will offset losses from the drop in High-yield Municipal's long position.| Blackrock High vs. Lgm Risk Managed | Blackrock High vs. Morningstar Aggressive Growth | Blackrock High vs. The Hartford High | Blackrock High vs. Fa 529 Aggressive |
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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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