Correlation Between Ford and Blackrock Muniholdings
Can any of the company-specific risk be diversified away by investing in both Ford 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 Ford and Blackrock Muniholdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and Blackrock Muniholdings Closed, you can compare the effects of market volatilities on Ford 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 Ford with a short position of Blackrock Muniholdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Blackrock Muniholdings.
Diversification Opportunities for Ford and Blackrock Muniholdings
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ford and Blackrock is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Blackrock Muniholdings Closed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Muniholdings and Ford 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 Ford Motor 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 Ford i.e., Ford and Blackrock Muniholdings go up and down completely randomly.
Pair Corralation between Ford and Blackrock Muniholdings
Taking into account the 90-day investment horizon Ford Motor is expected to generate 2.6 times more return on investment than Blackrock Muniholdings. However, Ford is 2.6 times more volatile than Blackrock Muniholdings Closed. It trades about 0.16 of its potential returns per unit of risk. Blackrock Muniholdings Closed is currently generating about 0.19 per unit of risk. If you would invest 965.00 in Ford Motor on November 2, 2024 and sell it today you would earn a total of 51.00 from holding Ford Motor or generate 5.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ford Motor vs. Blackrock Muniholdings Closed
Performance |
| Timeline |
| Ford Motor |
| Blackrock Muniholdings |
Ford and Blackrock Muniholdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Blackrock Muniholdings
The main advantage of trading using opposite Ford and Blackrock Muniholdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford 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.The idea behind Ford Motor and Blackrock Muniholdings Closed pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Blackrock Muniholdings vs. John Hancock Income | Blackrock Muniholdings vs. MFS High Income | Blackrock Muniholdings vs. MFS Investment Grade | Blackrock Muniholdings vs. DTF Tax Free |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
Other Complementary Tools
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments |