Correlation Between Blackrock Muniyield and Central Securities
Can any of the company-specific risk be diversified away by investing in both Blackrock Muniyield and Central Securities 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 Muniyield and Central Securities into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Blackrock Muniyield Quality and Central Securities, you can compare the effects of market volatilities on Blackrock Muniyield and Central Securities 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 Muniyield with a short position of Central Securities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackrock Muniyield and Central Securities.
Diversification Opportunities for Blackrock Muniyield and Central Securities
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Blackrock and Central is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Blackrock Muniyield Quality and Central Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Central Securities and Blackrock Muniyield 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 Muniyield Quality are associated (or correlated) with Central Securities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Central Securities has no effect on the direction of Blackrock Muniyield i.e., Blackrock Muniyield and Central Securities go up and down completely randomly.
Pair Corralation between Blackrock Muniyield and Central Securities
Considering the 90-day investment horizon Blackrock Muniyield is expected to generate 4.3 times less return on investment than Central Securities. But when comparing it to its historical volatility, Blackrock Muniyield Quality is 1.15 times less risky than Central Securities. It trades about 0.03 of its potential returns per unit of risk. Central Securities is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 3,177 in Central Securities on August 24, 2024 and sell it today you would earn a total of 1,475 from holding Central Securities or generate 46.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Blackrock Muniyield Quality vs. Central Securities
Performance |
| Timeline |
| Blackrock Muniyield |
| Central Securities |
Blackrock Muniyield and Central Securities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Blackrock Muniyield and Central Securities
The main advantage of trading using opposite Blackrock Muniyield and Central Securities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blackrock Muniyield position performs unexpectedly, Central Securities 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 Central Securities will offset losses from the drop in Central Securities' long position.| Blackrock Muniyield vs. John Hancock Income | Blackrock Muniyield vs. MFS High Income | Blackrock Muniyield vs. MFS Investment Grade | Blackrock Muniyield vs. Blackrock Muniholdings Closed |
| Central Securities vs. Invesco High Income | Central Securities vs. Munivest Fund | Central Securities vs. DWS Municipal Income | Central Securities vs. Blackrock Muniyield Quality |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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