Correlation Between Nuveen Floating and BlackRock Municipal
Can any of the company-specific risk be diversified away by investing in both Nuveen Floating 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 Nuveen Floating and BlackRock Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nuveen Floating Rate and BlackRock Municipal Income, you can compare the effects of market volatilities on Nuveen Floating 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 Nuveen Floating with a short position of BlackRock Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuveen Floating and BlackRock Municipal.
Diversification Opportunities for Nuveen Floating and BlackRock Municipal
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Nuveen and BlackRock is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen Floating Rate and BlackRock Municipal Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BlackRock Municipal and Nuveen Floating 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 Nuveen Floating Rate 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 Nuveen Floating i.e., Nuveen Floating and BlackRock Municipal go up and down completely randomly.
Pair Corralation between Nuveen Floating and BlackRock Municipal
Considering the 90-day investment horizon Nuveen Floating Rate is expected to under-perform the BlackRock Municipal. In addition to that, Nuveen Floating is 1.1 times more volatile than BlackRock Municipal Income. It trades about -0.02 of its total potential returns per unit of risk. BlackRock Municipal Income is currently generating about 0.02 per unit of volatility. If you would invest 959.00 in BlackRock Municipal Income on August 27, 2024 and sell it today you would earn a total of 60.00 from holding BlackRock Municipal Income or generate 6.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 25.71% |
| Values | Daily Returns |
Nuveen Floating Rate vs. BlackRock Municipal Income
Performance |
| Timeline |
| Nuveen Floating Rate |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| BlackRock Municipal |
Nuveen Floating and BlackRock Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nuveen Floating and BlackRock Municipal
The main advantage of trading using opposite Nuveen Floating and BlackRock Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nuveen Floating 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.| Nuveen Floating vs. Nuveen Floating Rate | Nuveen Floating vs. Blackrock Muni Intermediate | Nuveen Floating vs. Eaton Vance Senior | Nuveen Floating vs. Blackrock Floating Rate |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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