Correlation Between Blackrock and Ab Municipal
Can any of the company-specific risk be diversified away by investing in both Blackrock and Ab 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 and Ab Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Blackrock Pa Muni and Ab Municipal Bond, you can compare the effects of market volatilities on Blackrock and Ab 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 with a short position of Ab Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackrock and Ab Municipal.
Diversification Opportunities for Blackrock and Ab Municipal
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Blackrock and AUNCX is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Blackrock Pa Muni and Ab Municipal Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab Municipal Bond and Blackrock 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 Pa Muni are associated (or correlated) with Ab Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab Municipal Bond has no effect on the direction of Blackrock i.e., Blackrock and Ab Municipal go up and down completely randomly.
Pair Corralation between Blackrock and Ab Municipal
Assuming the 90 days horizon Blackrock Pa Muni is expected to under-perform the Ab Municipal. In addition to that, Blackrock is 2.31 times more volatile than Ab Municipal Bond. It trades about -0.02 of its total potential returns per unit of risk. Ab Municipal Bond is currently generating about 0.24 per unit of volatility. If you would invest 1,070 in Ab Municipal Bond on November 5, 2024 and sell it today you would earn a total of 6.00 from holding Ab Municipal Bond or generate 0.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Blackrock Pa Muni vs. Ab Municipal Bond
Performance |
| Timeline |
| Blackrock Pa Muni |
| Ab Municipal Bond |
Blackrock and Ab Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Blackrock and Ab Municipal
The main advantage of trading using opposite Blackrock and Ab Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blackrock position performs unexpectedly, Ab 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 Ab Municipal will offset losses from the drop in Ab Municipal's long position.| Blackrock vs. Federated Emerging Market | Blackrock vs. Barings Emerging Markets | Blackrock vs. Artisan Developing World | Blackrock vs. Balanced Strategy Fund |
| Ab Municipal vs. Ridgeworth Seix Government | Ab Municipal vs. Hsbc Government Money | Ab Municipal vs. Prudential Government Money | Ab Municipal vs. Federated Government 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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