Correlation Between Blackrock Muni and Ellsworth Convertible
Can any of the company-specific risk be diversified away by investing in both Blackrock Muni and Ellsworth Convertible 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 Ellsworth Convertible 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 Ellsworth Convertible Growth, you can compare the effects of market volatilities on Blackrock Muni and Ellsworth Convertible 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 Ellsworth Convertible. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackrock Muni and Ellsworth Convertible.
Diversification Opportunities for Blackrock Muni and Ellsworth Convertible
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Blackrock and Ellsworth is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Blackrock Muni Intermediate and Ellsworth Convertible Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ellsworth Convertible 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 Ellsworth Convertible. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ellsworth Convertible has no effect on the direction of Blackrock Muni i.e., Blackrock Muni and Ellsworth Convertible go up and down completely randomly.
Pair Corralation between Blackrock Muni and Ellsworth Convertible
Considering the 90-day investment horizon Blackrock Muni is expected to generate 3.63 times less return on investment than Ellsworth Convertible. But when comparing it to its historical volatility, Blackrock Muni Intermediate is 1.86 times less risky than Ellsworth Convertible. It trades about 0.14 of its potential returns per unit of risk. Ellsworth Convertible Growth is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 763.00 in Ellsworth Convertible Growth on August 28, 2024 and sell it today you would earn a total of 222.00 from holding Ellsworth Convertible Growth or generate 29.1% 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. Ellsworth Convertible Growth
Performance |
| Timeline |
| Blackrock Muni Inter |
| Ellsworth Convertible |
Blackrock Muni and Ellsworth Convertible Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Blackrock Muni and Ellsworth Convertible
The main advantage of trading using opposite Blackrock Muni and Ellsworth Convertible positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blackrock Muni position performs unexpectedly, Ellsworth Convertible 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 Ellsworth Convertible will offset losses from the drop in Ellsworth Convertible'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 |
| Ellsworth Convertible vs. Azimut Holding SpA | Ellsworth Convertible vs. Ameritrans Capital Corp | Ellsworth Convertible vs. Gdl Closed Fund | Ellsworth Convertible vs. Gabelli Global Small |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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