Correlation Between BlackRock Intermediate and SPDR MarketAxess
Can any of the company-specific risk be diversified away by investing in both BlackRock Intermediate and SPDR MarketAxess 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 BlackRock Intermediate and SPDR MarketAxess into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BlackRock Intermediate Muni and SPDR MarketAxess Investment, you can compare the effects of market volatilities on BlackRock Intermediate and SPDR MarketAxess 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 BlackRock Intermediate with a short position of SPDR MarketAxess. Check out your portfolio center. Please also check ongoing floating volatility patterns of BlackRock Intermediate and SPDR MarketAxess.
Diversification Opportunities for BlackRock Intermediate and SPDR MarketAxess
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between BlackRock and SPDR is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding BlackRock Intermediate Muni and SPDR MarketAxess Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR MarketAxess Inv and BlackRock Intermediate 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 BlackRock Intermediate Muni are associated (or correlated) with SPDR MarketAxess. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR MarketAxess Inv has no effect on the direction of BlackRock Intermediate i.e., BlackRock Intermediate and SPDR MarketAxess go up and down completely randomly.
Pair Corralation between BlackRock Intermediate and SPDR MarketAxess
Given the investment horizon of 90 days BlackRock Intermediate is expected to generate 1.32 times less return on investment than SPDR MarketAxess. But when comparing it to its historical volatility, BlackRock Intermediate Muni is 2.08 times less risky than SPDR MarketAxess. It trades about 0.08 of its potential returns per unit of risk. SPDR MarketAxess Investment is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 8,816 in SPDR MarketAxess Investment on August 30, 2024 and sell it today you would earn a total of 816.00 from holding SPDR MarketAxess Investment or generate 9.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
BlackRock Intermediate Muni vs. SPDR MarketAxess Investment
Performance |
| Timeline |
| BlackRock Intermediate |
| SPDR MarketAxess Inv |
BlackRock Intermediate and SPDR MarketAxess Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BlackRock Intermediate and SPDR MarketAxess
The main advantage of trading using opposite BlackRock Intermediate and SPDR MarketAxess positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BlackRock Intermediate position performs unexpectedly, SPDR MarketAxess 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 SPDR MarketAxess will offset losses from the drop in SPDR MarketAxess' long position.| BlackRock Intermediate vs. SSGA Active Trust | BlackRock Intermediate vs. SSGA Active Trust | BlackRock Intermediate vs. SPDR Nuveen Municipal |
| SPDR MarketAxess vs. SSGA Active Trust | SPDR MarketAxess vs. SPDR Series Trust | SPDR MarketAxess vs. SPDR Bloomberg Barclays | SPDR MarketAxess vs. SSGA Active Trust |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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