Correlation Between Blackrock Muniholdings and United Overseas
Can any of the company-specific risk be diversified away by investing in both Blackrock Muniholdings and United Overseas 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 United Overseas 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 United Overseas Bank, you can compare the effects of market volatilities on Blackrock Muniholdings and United Overseas 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 United Overseas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackrock Muniholdings and United Overseas.
Diversification Opportunities for Blackrock Muniholdings and United Overseas
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Blackrock and United is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Blackrock Muniholdings Ny and United Overseas Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Overseas 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 United Overseas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Overseas Bank has no effect on the direction of Blackrock Muniholdings i.e., Blackrock Muniholdings and United Overseas go up and down completely randomly.
Pair Corralation between Blackrock Muniholdings and United Overseas
Considering the 90-day investment horizon Blackrock Muniholdings is expected to generate 6.25 times less return on investment than United Overseas. But when comparing it to its historical volatility, Blackrock Muniholdings Ny is 3.08 times less risky than United Overseas. It trades about 0.12 of its potential returns per unit of risk. United Overseas Bank is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 4,916 in United Overseas Bank on August 28, 2024 and sell it today you would earn a total of 485.00 from holding United Overseas Bank or generate 9.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Blackrock Muniholdings Ny vs. United Overseas Bank
Performance |
| Timeline |
| Blackrock Muniholdings |
| United Overseas Bank |
Blackrock Muniholdings and United Overseas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Blackrock Muniholdings and United Overseas
The main advantage of trading using opposite Blackrock Muniholdings and United Overseas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blackrock Muniholdings position performs unexpectedly, United Overseas 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 United Overseas will offset losses from the drop in United Overseas' 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 |
| United Overseas vs. KBC Groep NV | United Overseas vs. DBS Group Holdings | United Overseas vs. HomeStreet | United Overseas vs. Bank of Hawaii |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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