Correlation Between Blackrock Muniholdings and Western Asset
Can any of the company-specific risk be diversified away by investing in both Blackrock Muniholdings and Western Asset 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 Western Asset 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 Western Asset Managed, you can compare the effects of market volatilities on Blackrock Muniholdings and Western Asset 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 Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackrock Muniholdings and Western Asset.
Diversification Opportunities for Blackrock Muniholdings and Western Asset
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Blackrock and Western is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Blackrock Muniholdings Quality and Western Asset Managed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset Managed 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 Western Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Asset Managed has no effect on the direction of Blackrock Muniholdings i.e., Blackrock Muniholdings and Western Asset go up and down completely randomly.
Pair Corralation between Blackrock Muniholdings and Western Asset
Considering the 90-day investment horizon Blackrock Muniholdings Quality is expected to generate 0.97 times more return on investment than Western Asset. However, Blackrock Muniholdings Quality is 1.03 times less risky than Western Asset. It trades about 0.44 of its potential returns per unit of risk. Western Asset Managed is currently generating about 0.14 per unit of risk. If you would invest 1,021 in Blackrock Muniholdings Quality on August 28, 2024 and sell it today you would earn a total of 55.00 from holding Blackrock Muniholdings Quality or generate 5.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Blackrock Muniholdings Quality vs. Western Asset Managed
Performance |
| Timeline |
| Blackrock Muniholdings |
| Western Asset Managed |
Blackrock Muniholdings and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Blackrock Muniholdings and Western Asset
The main advantage of trading using opposite Blackrock Muniholdings and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blackrock Muniholdings position performs unexpectedly, Western Asset 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 Western Asset will offset losses from the drop in Western Asset'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 |
| Western Asset vs. Western Asset Municipal | Western Asset vs. Blackrock Muniholdings Quality | Western Asset vs. DTF Tax Free | Western Asset 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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