Correlation Between BNY Mellon and Blackrock Muniholdings
Can any of the company-specific risk be diversified away by investing in both BNY Mellon 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 BNY Mellon and Blackrock Muniholdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BNY Mellon Strategic and Blackrock Muniholdings Closed, you can compare the effects of market volatilities on BNY Mellon 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 BNY Mellon with a short position of Blackrock Muniholdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of BNY Mellon and Blackrock Muniholdings.
Diversification Opportunities for BNY Mellon and Blackrock Muniholdings
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between BNY and Blackrock is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding BNY Mellon Strategic and Blackrock Muniholdings Closed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Muniholdings and BNY Mellon 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 BNY Mellon Strategic 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 BNY Mellon i.e., BNY Mellon and Blackrock Muniholdings go up and down completely randomly.
Pair Corralation between BNY Mellon and Blackrock Muniholdings
Considering the 90-day investment horizon BNY Mellon is expected to generate 2.95 times less return on investment than Blackrock Muniholdings. But when comparing it to its historical volatility, BNY Mellon Strategic is 1.1 times less risky than Blackrock Muniholdings. It trades about 0.07 of its potential returns per unit of risk. Blackrock Muniholdings Closed is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 1,180 in Blackrock Muniholdings Closed on November 2, 2024 and sell it today you would earn a total of 28.00 from holding Blackrock Muniholdings Closed or generate 2.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.0% |
| Values | Daily Returns |
BNY Mellon Strategic vs. Blackrock Muniholdings Closed
Performance |
| Timeline |
| BNY Mellon Strategic |
| Blackrock Muniholdings |
BNY Mellon and Blackrock Muniholdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BNY Mellon and Blackrock Muniholdings
The main advantage of trading using opposite BNY Mellon and Blackrock Muniholdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BNY Mellon 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.| BNY Mellon vs. Blackrock Muniholdings Closed | BNY Mellon vs. DTF Tax Free | BNY Mellon vs. John Hancock Income | BNY Mellon vs. MFS Investment Grade |
| Blackrock Muniholdings vs. John Hancock Income | Blackrock Muniholdings vs. MFS High Income | Blackrock Muniholdings vs. MFS Investment Grade | Blackrock Muniholdings vs. DTF Tax Free |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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