Correlation Between Gladstone Investment and BlackRock Municipal
Can any of the company-specific risk be diversified away by investing in both Gladstone Investment and BlackRock 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 Gladstone Investment and BlackRock Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gladstone Investment and BlackRock Municipal Income, you can compare the effects of market volatilities on Gladstone Investment and BlackRock 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 Gladstone Investment with a short position of BlackRock Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gladstone Investment and BlackRock Municipal.
Diversification Opportunities for Gladstone Investment and BlackRock Municipal
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gladstone and BlackRock is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Gladstone Investment and BlackRock Municipal Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BlackRock Municipal and Gladstone Investment 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 Gladstone Investment are associated (or correlated) with BlackRock Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BlackRock Municipal has no effect on the direction of Gladstone Investment i.e., Gladstone Investment and BlackRock Municipal go up and down completely randomly.
Pair Corralation between Gladstone Investment and BlackRock Municipal
Given the investment horizon of 90 days Gladstone Investment is expected to generate 3.46 times less return on investment than BlackRock Municipal. In addition to that, Gladstone Investment is 1.59 times more volatile than BlackRock Municipal Income. It trades about 0.06 of its total potential returns per unit of risk. BlackRock Municipal Income is currently generating about 0.31 per unit of volatility. If you would invest 1,074 in BlackRock Municipal Income on October 24, 2024 and sell it today you would earn a total of 37.00 from holding BlackRock Municipal Income or generate 3.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gladstone Investment vs. BlackRock Municipal Income
Performance |
| Timeline |
| Gladstone Investment |
| BlackRock Municipal |
Gladstone Investment and BlackRock Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gladstone Investment and BlackRock Municipal
The main advantage of trading using opposite Gladstone Investment and BlackRock Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gladstone Investment position performs unexpectedly, BlackRock 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 BlackRock Municipal will offset losses from the drop in BlackRock Municipal's long position.| Gladstone Investment vs. PennantPark Floating Rate | Gladstone Investment vs. Horizon Technology Finance | Gladstone Investment vs. Stellus Capital Investment | Gladstone Investment vs. Prospect Capital |
| BlackRock Municipal vs. Munivest Fund | BlackRock Municipal vs. Blackrock Muniyield Quality | BlackRock Municipal vs. Blackrock Muniyield Quality | BlackRock Municipal vs. Blackrock Muniholdings Closed |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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