Correlation Between BlackRock Municipal and Invesco High
Can any of the company-specific risk be diversified away by investing in both BlackRock Municipal and Invesco High 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 Municipal and Invesco High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BlackRock Municipal Income and Invesco High Income, you can compare the effects of market volatilities on BlackRock Municipal and Invesco High 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 Municipal with a short position of Invesco High. Check out your portfolio center. Please also check ongoing floating volatility patterns of BlackRock Municipal and Invesco High.
Diversification Opportunities for BlackRock Municipal and Invesco High
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between BlackRock and Invesco is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding BlackRock Municipal Income and Invesco High Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco High Income and BlackRock Municipal 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 Municipal Income are associated (or correlated) with Invesco High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco High Income has no effect on the direction of BlackRock Municipal i.e., BlackRock Municipal and Invesco High go up and down completely randomly.
Pair Corralation between BlackRock Municipal and Invesco High
Considering the 90-day investment horizon BlackRock Municipal Income is expected to generate 5.83 times more return on investment than Invesco High. However, BlackRock Municipal is 5.83 times more volatile than Invesco High Income. It trades about 0.07 of its potential returns per unit of risk. Invesco High Income is currently generating about 0.29 per unit of risk. If you would invest 1,138 in BlackRock Municipal Income on August 28, 2024 and sell it today you would earn a total of 10.00 from holding BlackRock Municipal Income or generate 0.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BlackRock Municipal Income vs. Invesco High Income
Performance |
| Timeline |
| BlackRock Municipal |
| Invesco High Income |
BlackRock Municipal and Invesco High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BlackRock Municipal and Invesco High
The main advantage of trading using opposite BlackRock Municipal and Invesco High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BlackRock Municipal position performs unexpectedly, Invesco High 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 Invesco High will offset losses from the drop in Invesco High's long position.| BlackRock Municipal vs. Munivest Fund | BlackRock Municipal vs. Blackrock Muniyield Quality | BlackRock Municipal vs. Blackrock Muniyield Quality | BlackRock Municipal vs. Blackrock Muniholdings Closed |
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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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