Correlation Between Blackrock Muniyield and BlackRock Municipal
Can any of the company-specific risk be diversified away by investing in both Blackrock Muniyield and BlackRock 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 BlackRock 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 BlackRock Municipal Income, you can compare the effects of market volatilities on Blackrock Muniyield and BlackRock 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 BlackRock Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackrock Muniyield and BlackRock Municipal.
Diversification Opportunities for Blackrock Muniyield and BlackRock Municipal
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Blackrock and BlackRock is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Blackrock Muniyield Quality and BlackRock Municipal Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BlackRock Municipal 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 BlackRock Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BlackRock Municipal has no effect on the direction of Blackrock Muniyield i.e., Blackrock Muniyield and BlackRock Municipal go up and down completely randomly.
Pair Corralation between Blackrock Muniyield and BlackRock Municipal
Considering the 90-day investment horizon Blackrock Muniyield is expected to generate 1.31 times less return on investment than BlackRock Municipal. In addition to that, Blackrock Muniyield is 1.18 times more volatile than BlackRock Municipal Income. It trades about 0.14 of its total potential returns per unit of risk. BlackRock Municipal Income is currently generating about 0.21 per unit of volatility. If you would invest 1,009 in BlackRock Municipal Income on August 31, 2024 and sell it today you would earn a total of 26.00 from holding BlackRock Municipal Income or generate 2.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Blackrock Muniyield Quality vs. BlackRock Municipal Income
Performance |
| Timeline |
| Blackrock Muniyield |
| BlackRock Municipal |
Blackrock Muniyield and BlackRock Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Blackrock Muniyield and BlackRock Municipal
The main advantage of trading using opposite Blackrock Muniyield and BlackRock Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blackrock Muniyield position performs unexpectedly, BlackRock 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 BlackRock Municipal will offset losses from the drop in BlackRock Municipal's long position.| Blackrock Muniyield vs. DTF Tax Free | Blackrock Muniyield vs. DWS Municipal Income | Blackrock Muniyield vs. Blackrock Muni Intermediate | Blackrock Muniyield vs. Blackrock Muniholdings 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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