Correlation Between Blackrock Muniholdings and National Capital
Can any of the company-specific risk be diversified away by investing in both Blackrock Muniholdings and National Capital 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 National Capital 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 National Capital Bank, you can compare the effects of market volatilities on Blackrock Muniholdings and National Capital 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 National Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackrock Muniholdings and National Capital.
Diversification Opportunities for Blackrock Muniholdings and National Capital
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Blackrock and National is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Blackrock Muniholdings Ny and National Capital Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Capital Bank 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 National Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Capital Bank has no effect on the direction of Blackrock Muniholdings i.e., Blackrock Muniholdings and National Capital go up and down completely randomly.
Pair Corralation between Blackrock Muniholdings and National Capital
Considering the 90-day investment horizon Blackrock Muniholdings is expected to generate 231.98 times less return on investment than National Capital. But when comparing it to its historical volatility, Blackrock Muniholdings Ny is 175.33 times less risky than National Capital. It trades about 0.23 of its potential returns per unit of risk. National Capital Bank is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 4,923 in National Capital Bank on September 1, 2024 and sell it today you would earn a total of 3,577 from holding National Capital Bank or generate 72.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Blackrock Muniholdings Ny vs. National Capital Bank
Performance |
| Timeline |
| Blackrock Muniholdings |
| National Capital Bank |
Blackrock Muniholdings and National Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Blackrock Muniholdings and National Capital
The main advantage of trading using opposite Blackrock Muniholdings and National Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blackrock Muniholdings position performs unexpectedly, National Capital 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 National Capital will offset losses from the drop in National Capital'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 |
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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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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