Correlation Between Blackrock Muni and BlackRock Municipal
Can any of the company-specific risk be diversified away by investing in both Blackrock Muni 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 Muni 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 Muni Intermediate and BlackRock Municipal Income, you can compare the effects of market volatilities on Blackrock Muni 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 Muni with a short position of BlackRock Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackrock Muni and BlackRock Municipal.
Diversification Opportunities for Blackrock Muni and BlackRock Municipal
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Blackrock and BlackRock is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Blackrock Muni Intermediate 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 Muni 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 Muni Intermediate 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 Muni i.e., Blackrock Muni and BlackRock Municipal go up and down completely randomly.
Pair Corralation between Blackrock Muni and BlackRock Municipal
Considering the 90-day investment horizon Blackrock Muni is expected to generate 6.37 times less return on investment than BlackRock Municipal. But when comparing it to its historical volatility, Blackrock Muni Intermediate is 1.5 times less risky than BlackRock Municipal. It trades about 0.03 of its potential returns per unit of risk. BlackRock Municipal Income is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 1,094 in BlackRock Municipal Income on November 4, 2024 and sell it today you would earn a total of 18.00 from holding BlackRock Municipal Income or generate 1.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Blackrock Muni Intermediate vs. BlackRock Municipal Income
Performance |
| Timeline |
| Blackrock Muni Inter |
| BlackRock Municipal |
Blackrock Muni and BlackRock Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Blackrock Muni and BlackRock Municipal
The main advantage of trading using opposite Blackrock Muni and BlackRock Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blackrock Muni 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 Muni vs. Blackrock Muniyield | Blackrock Muni vs. Blackrock Muniyield Quality | Blackrock Muni vs. Blackrock Muniyield Quality | Blackrock Muni vs. Blackrock Muniholdings Quality |
| BlackRock Municipal vs. Munivest Fund | BlackRock Municipal vs. Blackrock Muniyield Quality | BlackRock Municipal vs. Blackrock Muniyield Quality | BlackRock Municipal vs. Blackrock Muniholdings Closed |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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