Correlation Between Blackrock Advantage and Ishares Municipal
Can any of the company-specific risk be diversified away by investing in both Blackrock Advantage and Ishares Municipal 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 Advantage and Ishares Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Blackrock Advantage Total and Ishares Municipal Bond, you can compare the effects of market volatilities on Blackrock Advantage and Ishares Municipal 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 Advantage with a short position of Ishares Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackrock Advantage and Ishares Municipal.
Diversification Opportunities for Blackrock Advantage and Ishares Municipal
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Blackrock and Ishares is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Blackrock Advantage Total and Ishares Municipal Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ishares Municipal Bond and Blackrock Advantage 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 Advantage Total are associated (or correlated) with Ishares Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ishares Municipal Bond has no effect on the direction of Blackrock Advantage i.e., Blackrock Advantage and Ishares Municipal go up and down completely randomly.
Pair Corralation between Blackrock Advantage and Ishares Municipal
Assuming the 90 days horizon Blackrock Advantage Total is expected to generate 4.89 times more return on investment than Ishares Municipal. However, Blackrock Advantage is 4.89 times more volatile than Ishares Municipal Bond. It trades about 0.07 of its potential returns per unit of risk. Ishares Municipal Bond is currently generating about 0.04 per unit of risk. If you would invest 2,564 in Blackrock Advantage Total on November 9, 2024 and sell it today you would earn a total of 542.00 from holding Blackrock Advantage Total or generate 21.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Blackrock Advantage Total vs. Ishares Municipal Bond
Performance |
| Timeline |
| Blackrock Advantage Total |
| Ishares Municipal Bond |
Blackrock Advantage and Ishares Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Blackrock Advantage and Ishares Municipal
The main advantage of trading using opposite Blackrock Advantage and Ishares Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blackrock Advantage position performs unexpectedly, Ishares Municipal 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 Ishares Municipal will offset losses from the drop in Ishares Municipal's long position.| Blackrock Advantage vs. Barings Emerging Markets | Blackrock Advantage vs. Issachar Fund Class | Blackrock Advantage vs. Western Asset E | Blackrock Advantage vs. Rbb Fund |
| Ishares Municipal vs. Rbb Fund | Ishares Municipal vs. Western Asset E | Ishares Municipal vs. Intermediate Term Tax Free Bond | Ishares Municipal vs. Aqr Long Short Equity |
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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