Correlation Between Blackrock Muniholdings and Federal Agricultural
Can any of the company-specific risk be diversified away by investing in both Blackrock Muniholdings and Federal Agricultural 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 Muniholdings and Federal Agricultural into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Blackrock Muniholdings Ny and Federal Agricultural Mortgage, you can compare the effects of market volatilities on Blackrock Muniholdings and Federal Agricultural 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 Muniholdings with a short position of Federal Agricultural. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackrock Muniholdings and Federal Agricultural.
Diversification Opportunities for Blackrock Muniholdings and Federal Agricultural
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Blackrock and Federal is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Blackrock Muniholdings Ny and Federal Agricultural Mortgage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federal Agricultural and Blackrock Muniholdings 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 Muniholdings Ny are associated (or correlated) with Federal Agricultural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federal Agricultural has no effect on the direction of Blackrock Muniholdings i.e., Blackrock Muniholdings and Federal Agricultural go up and down completely randomly.
Pair Corralation between Blackrock Muniholdings and Federal Agricultural
Considering the 90-day investment horizon Blackrock Muniholdings is expected to generate 626.39 times less return on investment than Federal Agricultural. But when comparing it to its historical volatility, Blackrock Muniholdings Ny is 338.93 times less risky than Federal Agricultural. It trades about 0.09 of its potential returns per unit of risk. Federal Agricultural Mortgage is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 13,697 in Federal Agricultural Mortgage on September 1, 2024 and sell it today you would earn a total of 2,804 from holding Federal Agricultural Mortgage or generate 20.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 79.37% |
| Values | Daily Returns |
Blackrock Muniholdings Ny vs. Federal Agricultural Mortgage
Performance |
| Timeline |
| Blackrock Muniholdings |
| Federal Agricultural |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
Blackrock Muniholdings and Federal Agricultural Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Blackrock Muniholdings and Federal Agricultural
The main advantage of trading using opposite Blackrock Muniholdings and Federal Agricultural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blackrock Muniholdings position performs unexpectedly, Federal Agricultural 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 Federal Agricultural will offset losses from the drop in Federal Agricultural's long position.| Blackrock Muniholdings vs. Eaton Vance National | Blackrock Muniholdings vs. Invesco High Income | Blackrock Muniholdings vs. Nuveen California Select | Blackrock Muniholdings vs. MFS Investment Grade |
| Federal Agricultural vs. Visa Class A | Federal Agricultural vs. Diamond Hill Investment | Federal Agricultural vs. Distoken Acquisition | Federal Agricultural vs. Associated Capital Group |
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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