Correlation Between GM and BlackRock Municipal
Can any of the company-specific risk be diversified away by investing in both GM 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 GM and BlackRock Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and BlackRock Municipal Income, you can compare the effects of market volatilities on GM 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 GM with a short position of BlackRock Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and BlackRock Municipal.
Diversification Opportunities for GM and BlackRock Municipal
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GM and BlackRock is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and BlackRock Municipal Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BlackRock Municipal and GM 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 General Motors 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 GM i.e., GM and BlackRock Municipal go up and down completely randomly.
Pair Corralation between GM and BlackRock Municipal
If you would invest (100.00) in BlackRock Municipal Income on September 12, 2024 and sell it today you would earn a total of 100.00 from holding BlackRock Municipal Income or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
General Motors vs. BlackRock Municipal Income
Performance |
| Timeline |
| General Motors |
| BlackRock Municipal |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
GM and BlackRock Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and BlackRock Municipal
The main advantage of trading using opposite GM and BlackRock Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM 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.The idea behind General Motors and BlackRock Municipal Income 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 Municipal vs. Meiwu Technology Co | BlackRock Municipal vs. NETGEAR | BlackRock Municipal vs. RadNet Inc | BlackRock Municipal vs. Centessa Pharmaceuticals PLC |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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