Correlation Between BlackRock Municipal and Invesco Municipal
Can any of the company-specific risk be diversified away by investing in both BlackRock Municipal and Invesco 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 Municipal and Invesco Municipal 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 Municipal Trust, you can compare the effects of market volatilities on BlackRock Municipal and Invesco 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 Municipal with a short position of Invesco Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of BlackRock Municipal and Invesco Municipal.
Diversification Opportunities for BlackRock Municipal and Invesco Municipal
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between BlackRock and Invesco is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding BlackRock Municipal Income and Invesco Municipal Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Municipal Trust 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 Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Municipal Trust has no effect on the direction of BlackRock Municipal i.e., BlackRock Municipal and Invesco Municipal go up and down completely randomly.
Pair Corralation between BlackRock Municipal and Invesco Municipal
Considering the 90-day investment horizon BlackRock Municipal is expected to generate 1.94 times less return on investment than Invesco Municipal. In addition to that, BlackRock Municipal is 1.0 times more volatile than Invesco Municipal Trust. It trades about 0.02 of its total potential returns per unit of risk. Invesco Municipal Trust is currently generating about 0.05 per unit of volatility. If you would invest 854.00 in Invesco Municipal Trust on December 14, 2024 and sell it today you would earn a total of 127.00 from holding Invesco Municipal Trust or generate 14.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.79% |
| Values | Daily Returns |
BlackRock Municipal Income vs. Invesco Municipal Trust
Performance |
| Timeline |
| BlackRock Municipal |
| Invesco Municipal Trust |
BlackRock Municipal and Invesco Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BlackRock Municipal and Invesco Municipal
The main advantage of trading using opposite BlackRock Municipal and Invesco Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BlackRock Municipal position performs unexpectedly, Invesco 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 Invesco Municipal will offset losses from the drop in Invesco Municipal's long position.| BlackRock Municipal vs. Munivest Fund | ||
| BlackRock Municipal vs. Blackrock Muniyield Quality | ||
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| Invesco Municipal vs. Invesco Trust For | ||
| Invesco Municipal vs. Invesco Quality Municipal | ||
| Invesco Municipal vs. Invesco Municipal Opportunity | ||
| Invesco Municipal vs. MFS High Income |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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