Correlation Between BlackRock MIT and BlackRock Floating
Can any of the company-specific risk be diversified away by investing in both BlackRock MIT and BlackRock Floating 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 MIT and BlackRock Floating into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BlackRock MIT II and BlackRock Floating Rate, you can compare the effects of market volatilities on BlackRock MIT and BlackRock Floating 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 MIT with a short position of BlackRock Floating. Check out your portfolio center. Please also check ongoing floating volatility patterns of BlackRock MIT and BlackRock Floating.
Diversification Opportunities for BlackRock MIT and BlackRock Floating
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BlackRock and BlackRock is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding BlackRock MIT II and BlackRock Floating Rate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BlackRock Floating Rate and BlackRock MIT 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 MIT II are associated (or correlated) with BlackRock Floating. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BlackRock Floating Rate has no effect on the direction of BlackRock MIT i.e., BlackRock MIT and BlackRock Floating go up and down completely randomly.
Pair Corralation between BlackRock MIT and BlackRock Floating
Considering the 90-day investment horizon BlackRock MIT II is expected to under-perform the BlackRock Floating. But the stock apears to be less risky and, when comparing its historical volatility, BlackRock MIT II is 1.04 times less risky than BlackRock Floating. The stock trades about -0.08 of its potential returns per unit of risk. The BlackRock Floating Rate is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,259 in BlackRock Floating Rate on August 28, 2024 and sell it today you would earn a total of 32.00 from holding BlackRock Floating Rate or generate 2.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BlackRock MIT II vs. BlackRock Floating Rate
Performance |
| Timeline |
| BlackRock MIT II |
| BlackRock Floating Rate |
BlackRock MIT and BlackRock Floating Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BlackRock MIT and BlackRock Floating
The main advantage of trading using opposite BlackRock MIT and BlackRock Floating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BlackRock MIT position performs unexpectedly, BlackRock Floating 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 Floating will offset losses from the drop in BlackRock Floating's long position.| BlackRock MIT vs. Blackrock Munivest | BlackRock MIT vs. Invesco Municipal Trust | BlackRock MIT vs. BlackRock Municipal Income | BlackRock MIT vs. Eaton Vance Mbf |
| BlackRock Floating vs. MFS Investment Grade | BlackRock Floating vs. Invesco High Income | BlackRock Floating vs. Eaton Vance National | BlackRock Floating vs. Nuveen California Select |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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