Correlation Between Western Asset and Blackrock Muniholdings
Can any of the company-specific risk be diversified away by investing in both Western Asset 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 Western Asset and Blackrock Muniholdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Asset Global and Blackrock Muniholdings Closed, you can compare the effects of market volatilities on Western Asset 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 Western Asset with a short position of Blackrock Muniholdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Blackrock Muniholdings.
Diversification Opportunities for Western Asset and Blackrock Muniholdings
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Western and Blackrock is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Global and Blackrock Muniholdings Closed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Muniholdings and Western Asset 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 Western Asset Global 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 Western Asset i.e., Western Asset and Blackrock Muniholdings go up and down completely randomly.
Pair Corralation between Western Asset and Blackrock Muniholdings
Considering the 90-day investment horizon Western Asset Global is expected to under-perform the Blackrock Muniholdings. But the etf apears to be less risky and, when comparing its historical volatility, Western Asset Global is 1.29 times less risky than Blackrock Muniholdings. The etf trades about -0.19 of its potential returns per unit of risk. The Blackrock Muniholdings Closed is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest 1,229 in Blackrock Muniholdings Closed on August 24, 2024 and sell it today you would lose (14.00) from holding Blackrock Muniholdings Closed or give up 1.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Asset Global vs. Blackrock Muniholdings Closed
Performance |
| Timeline |
| Western Asset Global |
| Blackrock Muniholdings |
Western Asset and Blackrock Muniholdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Blackrock Muniholdings
The main advantage of trading using opposite Western Asset and Blackrock Muniholdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset 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.| Western Asset vs. MFS Investment Grade | Western Asset vs. Invesco High Income | Western Asset vs. Eaton Vance National | Western Asset vs. Nuveen California Select |
| Blackrock Muniholdings vs. MFS Investment Grade | Blackrock Muniholdings vs. Eaton Vance National | Blackrock Muniholdings vs. Blackrock Muniyield Quality | Blackrock Muniholdings vs. Munivest Fund |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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