Correlation Between HP and Blackrock Muniyield
Can any of the company-specific risk be diversified away by investing in both HP and Blackrock Muniyield 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 HP and Blackrock Muniyield into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HP Inc and Blackrock Muniyield New, you can compare the effects of market volatilities on HP and Blackrock Muniyield 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 HP with a short position of Blackrock Muniyield. Check out your portfolio center. Please also check ongoing floating volatility patterns of HP and Blackrock Muniyield.
Diversification Opportunities for HP and Blackrock Muniyield
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between HP and Blackrock is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding HP Inc and Blackrock Muniyield New in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Muniyield New and HP 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 HP Inc are associated (or correlated) with Blackrock Muniyield. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock Muniyield New has no effect on the direction of HP i.e., HP and Blackrock Muniyield go up and down completely randomly.
Pair Corralation between HP and Blackrock Muniyield
Considering the 90-day investment horizon HP Inc is expected to generate 2.04 times more return on investment than Blackrock Muniyield. However, HP is 2.04 times more volatile than Blackrock Muniyield New. It trades about 0.15 of its potential returns per unit of risk. Blackrock Muniyield New is currently generating about 0.04 per unit of risk. If you would invest 3,251 in HP Inc on November 18, 2024 and sell it today you would earn a total of 113.00 from holding HP Inc or generate 3.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
HP Inc vs. Blackrock Muniyield New
Performance |
| Timeline |
| HP Inc |
| Blackrock Muniyield New |
HP and Blackrock Muniyield Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HP and Blackrock Muniyield
The main advantage of trading using opposite HP and Blackrock Muniyield positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HP position performs unexpectedly, Blackrock Muniyield 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 Muniyield will offset losses from the drop in Blackrock Muniyield's long position.The idea behind HP Inc and Blackrock Muniyield New 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 Muniyield vs. MFS Investment Grade | Blackrock Muniyield vs. Eaton Vance National | Blackrock Muniyield vs. Federated Premier Municipal | Blackrock Muniyield vs. Blackrock Muniholdings Ny |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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