Correlation Between Blackrock Strategic and Ab Municipal
Can any of the company-specific risk be diversified away by investing in both Blackrock Strategic and Ab 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 Blackrock Strategic and Ab Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Blackrock Strategic Muni and Ab Municipal Bond, you can compare the effects of market volatilities on Blackrock Strategic and Ab 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 Blackrock Strategic with a short position of Ab Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackrock Strategic and Ab Municipal.
Diversification Opportunities for Blackrock Strategic and Ab Municipal
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Blackrock and AUNTX is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Blackrock Strategic Muni and Ab Municipal Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab Municipal Bond and Blackrock Strategic 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 Strategic Muni are associated (or correlated) with Ab Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab Municipal Bond has no effect on the direction of Blackrock Strategic i.e., Blackrock Strategic and Ab Municipal go up and down completely randomly.
Pair Corralation between Blackrock Strategic and Ab Municipal
Assuming the 90 days horizon Blackrock Strategic Muni is expected to under-perform the Ab Municipal. In addition to that, Blackrock Strategic is 1.51 times more volatile than Ab Municipal Bond. It trades about -0.04 of its total potential returns per unit of risk. Ab Municipal Bond is currently generating about 0.07 per unit of volatility. If you would invest 1,057 in Ab Municipal Bond on November 3, 2024 and sell it today you would earn a total of 15.00 from holding Ab Municipal Bond or generate 1.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Blackrock Strategic Muni vs. Ab Municipal Bond
Performance |
| Timeline |
| Blackrock Strategic Muni |
| Ab Municipal Bond |
Blackrock Strategic and Ab Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Blackrock Strategic and Ab Municipal
The main advantage of trading using opposite Blackrock Strategic and Ab Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blackrock Strategic position performs unexpectedly, Ab 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 Ab Municipal will offset losses from the drop in Ab Municipal's long position.| Blackrock Strategic vs. Lord Abbett Diversified | Blackrock Strategic vs. Tax Managed Mid Small | Blackrock Strategic vs. Diversified Income Fund | Blackrock Strategic vs. Gmo Quality Fund |
| Ab Municipal vs. Multisector Bond Sma | Ab Municipal vs. Artisan High Income | Ab Municipal vs. Barings High Yield | Ab Municipal vs. Ab Bond Inflation |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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