Correlation Between Blackrock Muni and BlackRock ESG
Can any of the company-specific risk be diversified away by investing in both Blackrock Muni and BlackRock ESG 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 ESG 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 ESG Capital, you can compare the effects of market volatilities on Blackrock Muni and BlackRock ESG 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 ESG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackrock Muni and BlackRock ESG.
Diversification Opportunities for Blackrock Muni and BlackRock ESG
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Blackrock and BlackRock is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Blackrock Muni Intermediate and BlackRock ESG Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BlackRock ESG Capital 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 ESG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BlackRock ESG Capital has no effect on the direction of Blackrock Muni i.e., Blackrock Muni and BlackRock ESG go up and down completely randomly.
Pair Corralation between Blackrock Muni and BlackRock ESG
Considering the 90-day investment horizon Blackrock Muni is expected to generate 1.69 times less return on investment than BlackRock ESG. But when comparing it to its historical volatility, Blackrock Muni Intermediate is 1.05 times less risky than BlackRock ESG. It trades about 0.08 of its potential returns per unit of risk. BlackRock ESG Capital is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 1,684 in BlackRock ESG Capital on August 28, 2024 and sell it today you would earn a total of 40.00 from holding BlackRock ESG Capital or generate 2.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Blackrock Muni Intermediate vs. BlackRock ESG Capital
Performance |
| Timeline |
| Blackrock Muni Inter |
| BlackRock ESG Capital |
Blackrock Muni and BlackRock ESG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Blackrock Muni and BlackRock ESG
The main advantage of trading using opposite Blackrock Muni and BlackRock ESG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blackrock Muni position performs unexpectedly, BlackRock ESG 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 ESG will offset losses from the drop in BlackRock ESG's long position.| Blackrock Muni vs. DTF Tax Free | Blackrock Muni vs. MFS High Yield | Blackrock Muni vs. MFS High Income | Blackrock Muni vs. John Hancock Income |
| BlackRock ESG vs. Brightsphere Investment Group | BlackRock ESG vs. Franklin Templeton Limited | BlackRock ESG vs. Blackrock Muni Intermediate | BlackRock ESG vs. Munivest Fund |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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