Correlation Between Blackrock Muniholdings and BlackRock Municipal
Can any of the company-specific risk be diversified away by investing in both Blackrock Muniholdings 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 Muniholdings 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 Muniholdings Quality and BlackRock Municipal Income, you can compare the effects of market volatilities on Blackrock Muniholdings 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 Muniholdings with a short position of BlackRock Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackrock Muniholdings and BlackRock Municipal.
Diversification Opportunities for Blackrock Muniholdings and BlackRock Municipal
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Blackrock and BlackRock is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Blackrock Muniholdings 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 Muniholdings 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 Muniholdings 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 Muniholdings i.e., Blackrock Muniholdings and BlackRock Municipal go up and down completely randomly.
Pair Corralation between Blackrock Muniholdings and BlackRock Municipal
Considering the 90-day investment horizon Blackrock Muniholdings Quality is expected to generate 0.94 times more return on investment than BlackRock Municipal. However, Blackrock Muniholdings Quality is 1.06 times less risky than BlackRock Municipal. It trades about 0.37 of its potential returns per unit of risk. BlackRock Municipal Income is currently generating about 0.05 per unit of risk. If you would invest 1,021 in Blackrock Muniholdings Quality on August 27, 2024 and sell it today you would earn a total of 41.00 from holding Blackrock Muniholdings Quality or generate 4.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Blackrock Muniholdings Quality vs. BlackRock Municipal Income
Performance |
| Timeline |
| Blackrock Muniholdings |
| BlackRock Municipal |
Blackrock Muniholdings and BlackRock Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Blackrock Muniholdings and BlackRock Municipal
The main advantage of trading using opposite Blackrock Muniholdings and BlackRock Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blackrock Muniholdings 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 Muniholdings vs. DTF Tax Free | Blackrock Muniholdings vs. MFS High Yield | Blackrock Muniholdings vs. MFS High Income | Blackrock Muniholdings vs. John Hancock 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
Other Complementary Tools
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk |