Correlation Between Blackrock Muniyield and Invesco Municipal
Can any of the company-specific risk be diversified away by investing in both Blackrock Muniyield and Invesco 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 Muniyield and Invesco Municipal 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 Invesco Municipal Trust, you can compare the effects of market volatilities on Blackrock Muniyield and Invesco 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 Muniyield with a short position of Invesco Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackrock Muniyield and Invesco Municipal.
Diversification Opportunities for Blackrock Muniyield and Invesco Municipal
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Blackrock and Invesco is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Blackrock Muniyield Quality and Invesco Municipal Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Municipal Trust 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 Invesco Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Municipal Trust has no effect on the direction of Blackrock Muniyield i.e., Blackrock Muniyield and Invesco Municipal go up and down completely randomly.
Pair Corralation between Blackrock Muniyield and Invesco Municipal
Considering the 90-day investment horizon Blackrock Muniyield is expected to generate 1.45 times less return on investment than Invesco Municipal. But when comparing it to its historical volatility, Blackrock Muniyield Quality is 1.06 times less risky than Invesco Municipal. It trades about 0.03 of its potential returns per unit of risk. Invesco Municipal Trust is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 854.00 in Invesco Municipal Trust on December 14, 2024 and sell it today you would earn a total of 127.00 from holding Invesco Municipal Trust or generate 14.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.79% |
| Values | Daily Returns |
Blackrock Muniyield Quality vs. Invesco Municipal Trust
Performance |
| Timeline |
| Blackrock Muniyield |
| Invesco Municipal Trust |
Blackrock Muniyield and Invesco Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Blackrock Muniyield and Invesco Municipal
The main advantage of trading using opposite Blackrock Muniyield and Invesco Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blackrock Muniyield position performs unexpectedly, Invesco 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 Invesco Municipal will offset losses from the drop in Invesco Municipal's long position.| Blackrock Muniyield vs. John Hancock Income | ||
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| Invesco Municipal vs. Invesco Trust For | ||
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| Invesco Municipal vs. Invesco Municipal Opportunity | ||
| Invesco Municipal vs. MFS High Income |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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