Correlation Between Blackrock Muniholdings and Quaint Oak
Can any of the company-specific risk be diversified away by investing in both Blackrock Muniholdings and Quaint Oak 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 Quaint Oak 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 Quaint Oak Bancorp, you can compare the effects of market volatilities on Blackrock Muniholdings and Quaint Oak 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 Quaint Oak. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackrock Muniholdings and Quaint Oak.
Diversification Opportunities for Blackrock Muniholdings and Quaint Oak
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Blackrock and Quaint is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Blackrock Muniholdings Ny and Quaint Oak Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quaint Oak Bancorp 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 Quaint Oak. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quaint Oak Bancorp has no effect on the direction of Blackrock Muniholdings i.e., Blackrock Muniholdings and Quaint Oak go up and down completely randomly.
Pair Corralation between Blackrock Muniholdings and Quaint Oak
Considering the 90-day investment horizon Blackrock Muniholdings is expected to generate 1.81 times less return on investment than Quaint Oak. But when comparing it to its historical volatility, Blackrock Muniholdings Ny is 1.34 times less risky than Quaint Oak. It trades about 0.12 of its potential returns per unit of risk. Quaint Oak Bancorp is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 1,075 in Quaint Oak Bancorp on August 29, 2024 and sell it today you would earn a total of 30.00 from holding Quaint Oak Bancorp or generate 2.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Blackrock Muniholdings Ny vs. Quaint Oak Bancorp
Performance |
| Timeline |
| Blackrock Muniholdings |
| Quaint Oak Bancorp |
Blackrock Muniholdings and Quaint Oak Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Blackrock Muniholdings and Quaint Oak
The main advantage of trading using opposite Blackrock Muniholdings and Quaint Oak positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blackrock Muniholdings position performs unexpectedly, Quaint Oak 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 Quaint Oak will offset losses from the drop in Quaint Oak'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 |
| Quaint Oak vs. Invesco High Income | Quaint Oak vs. Blackrock Muniholdings Ny | Quaint Oak vs. MFS Investment Grade | Quaint Oak vs. Federated Premier Municipal |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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