Correlation Between Blackrock Muniholdings and Merrill Lynch
Can any of the company-specific risk be diversified away by investing in both Blackrock Muniholdings and Merrill Lynch 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 Merrill Lynch 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 Merrill Lynch, you can compare the effects of market volatilities on Blackrock Muniholdings and Merrill Lynch 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 Merrill Lynch. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackrock Muniholdings and Merrill Lynch.
Diversification Opportunities for Blackrock Muniholdings and Merrill Lynch
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Blackrock and Merrill is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Blackrock Muniholdings Ny and Merrill Lynch in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Merrill Lynch 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 Merrill Lynch. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Merrill Lynch has no effect on the direction of Blackrock Muniholdings i.e., Blackrock Muniholdings and Merrill Lynch go up and down completely randomly.
Pair Corralation between Blackrock Muniholdings and Merrill Lynch
If you would invest 1,057 in Blackrock Muniholdings Ny on August 27, 2024 and sell it today you would earn a total of 11.00 from holding Blackrock Muniholdings Ny or generate 1.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Blackrock Muniholdings Ny vs. Merrill Lynch
Performance |
| Timeline |
| Blackrock Muniholdings |
| Merrill Lynch |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Blackrock Muniholdings and Merrill Lynch Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Blackrock Muniholdings and Merrill Lynch
The main advantage of trading using opposite Blackrock Muniholdings and Merrill Lynch positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blackrock Muniholdings position performs unexpectedly, Merrill Lynch 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 Merrill Lynch will offset losses from the drop in Merrill Lynch'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 |
| Merrill Lynch vs. Blackrock Muniholdings Ny | Merrill Lynch vs. MFS Investment Grade | Merrill Lynch vs. Eaton Vance National | Merrill Lynch vs. Invesco High Income |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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