Correlation Between Blackrock and Muzinich
Can any of the company-specific risk be diversified away by investing in both Blackrock and Muzinich 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 and Muzinich into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Blackrock Hi Yld and Muzinich High Yield, you can compare the effects of market volatilities on Blackrock and Muzinich 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 with a short position of Muzinich. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackrock and Muzinich.
Diversification Opportunities for Blackrock and Muzinich
Very poor diversification
The 3 months correlation between Blackrock and Muzinich is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Blackrock Hi Yld and Muzinich High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Muzinich High Yield and Blackrock 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 Hi Yld are associated (or correlated) with Muzinich. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Muzinich High Yield has no effect on the direction of Blackrock i.e., Blackrock and Muzinich go up and down completely randomly.
Pair Corralation between Blackrock and Muzinich
Assuming the 90 days horizon Blackrock Hi Yld is expected to generate 1.25 times more return on investment than Muzinich. However, Blackrock is 1.25 times more volatile than Muzinich High Yield. It trades about 0.12 of its potential returns per unit of risk. Muzinich High Yield is currently generating about 0.14 per unit of risk. If you would invest 603.00 in Blackrock Hi Yld on August 30, 2024 and sell it today you would earn a total of 117.00 from holding Blackrock Hi Yld or generate 19.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Blackrock Hi Yld vs. Muzinich High Yield
Performance |
| Timeline |
| Blackrock Hi Yld |
| Muzinich High Yield |
Blackrock and Muzinich Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Blackrock and Muzinich
The main advantage of trading using opposite Blackrock and Muzinich positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blackrock position performs unexpectedly, Muzinich 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 Muzinich will offset losses from the drop in Muzinich's long position.| Blackrock vs. Prudential High Yield | Blackrock vs. HUMANA INC | Blackrock vs. Aquagold International | Blackrock vs. Barloworld Ltd ADR |
| Muzinich vs. Short Term Government Fund | Muzinich vs. Virtus Seix Government | Muzinich vs. Franklin Adjustable Government | Muzinich vs. Us Government Securities |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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