Correlation Between Blackrock Muniyield and Federated Investors
Can any of the company-specific risk be diversified away by investing in both Blackrock Muniyield and Federated Investors 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 Federated Investors 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 Federated Investors B, you can compare the effects of market volatilities on Blackrock Muniyield and Federated Investors 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 Federated Investors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackrock Muniyield and Federated Investors.
Diversification Opportunities for Blackrock Muniyield and Federated Investors
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Blackrock and Federated is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Blackrock Muniyield Quality and Federated Investors B in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Investors 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 Federated Investors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Investors has no effect on the direction of Blackrock Muniyield i.e., Blackrock Muniyield and Federated Investors go up and down completely randomly.
Pair Corralation between Blackrock Muniyield and Federated Investors
Considering the 90-day investment horizon Blackrock Muniyield Quality is expected to generate 0.38 times more return on investment than Federated Investors. However, Blackrock Muniyield Quality is 2.65 times less risky than Federated Investors. It trades about 0.22 of its potential returns per unit of risk. Federated Investors B is currently generating about -0.11 per unit of risk. If you would invest 1,165 in Blackrock Muniyield Quality on November 2, 2024 and sell it today you would earn a total of 23.00 from holding Blackrock Muniyield Quality or generate 1.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Blackrock Muniyield Quality vs. Federated Investors B
Performance |
| Timeline |
| Blackrock Muniyield |
| Federated Investors |
Blackrock Muniyield and Federated Investors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Blackrock Muniyield and Federated Investors
The main advantage of trading using opposite Blackrock Muniyield and Federated Investors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blackrock Muniyield position performs unexpectedly, Federated Investors 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 Federated Investors will offset losses from the drop in Federated Investors' 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 |
| Federated Investors vs. Federated Premier Municipal | Federated Investors vs. Blackrock Muniyield | Federated Investors vs. Diamond Hill Investment | Federated Investors vs. NXG NextGen Infrastructure |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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