Correlation Between Northern Lights and Blackrock Muniholdings
Can any of the company-specific risk be diversified away by investing in both Northern Lights and Blackrock Muniholdings 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 Northern Lights and Blackrock Muniholdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Northern Lights and Blackrock Muniholdings Ny, you can compare the effects of market volatilities on Northern Lights and Blackrock Muniholdings 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 Northern Lights with a short position of Blackrock Muniholdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Northern Lights and Blackrock Muniholdings.
Diversification Opportunities for Northern Lights and Blackrock Muniholdings
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Northern and Blackrock is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Northern Lights and Blackrock Muniholdings Ny in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Muniholdings and Northern Lights 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 Northern Lights are associated (or correlated) with Blackrock Muniholdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock Muniholdings has no effect on the direction of Northern Lights i.e., Northern Lights and Blackrock Muniholdings go up and down completely randomly.
Pair Corralation between Northern Lights and Blackrock Muniholdings
Given the investment horizon of 90 days Northern Lights is expected to generate 161.57 times more return on investment than Blackrock Muniholdings. However, Northern Lights is 161.57 times more volatile than Blackrock Muniholdings Ny. It trades about 0.1 of its potential returns per unit of risk. Blackrock Muniholdings Ny is currently generating about 0.05 per unit of risk. If you would invest 0.00 in Northern Lights on August 26, 2024 and sell it today you would earn a total of 2,573 from holding Northern Lights or generate 9.223372036854776E16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 29.43% |
| Values | Daily Returns |
Northern Lights vs. Blackrock Muniholdings Ny
Performance |
| Timeline |
| Northern Lights |
| Blackrock Muniholdings |
Northern Lights and Blackrock Muniholdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Northern Lights and Blackrock Muniholdings
The main advantage of trading using opposite Northern Lights and Blackrock Muniholdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Northern Lights position performs unexpectedly, Blackrock Muniholdings 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 Muniholdings will offset losses from the drop in Blackrock Muniholdings' long position.| Northern Lights vs. Blackrock Muniholdings Ny | Northern Lights vs. MFS Investment Grade | Northern Lights vs. Eaton Vance National | Northern Lights vs. Invesco High Income |
| Blackrock Muniholdings vs. Eaton Vance National | Blackrock Muniholdings vs. Invesco High Income | Blackrock Muniholdings vs. Nuveen California Select | Blackrock Muniholdings vs. MFS Investment Grade |
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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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