Correlation Between Blackrock Muni and Nuveen Municipal
Can any of the company-specific risk be diversified away by investing in both Blackrock Muni and Nuveen 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 Nuveen 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 Nuveen Municipal High, you can compare the effects of market volatilities on Blackrock Muni and Nuveen 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 Nuveen Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackrock Muni and Nuveen Municipal.
Diversification Opportunities for Blackrock Muni and Nuveen Municipal
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Blackrock and Nuveen is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Blackrock Muni Intermediate and Nuveen Municipal High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Municipal High 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 Nuveen Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Municipal High has no effect on the direction of Blackrock Muni i.e., Blackrock Muni and Nuveen Municipal go up and down completely randomly.
Pair Corralation between Blackrock Muni and Nuveen Municipal
Considering the 90-day investment horizon Blackrock Muni is expected to generate 1.57 times less return on investment than Nuveen Municipal. But when comparing it to its historical volatility, Blackrock Muni Intermediate is 1.33 times less risky than Nuveen Municipal. It trades about 0.05 of its potential returns per unit of risk. Nuveen Municipal High is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 914.00 in Nuveen Municipal High on November 29, 2024 and sell it today you would earn a total of 211.00 from holding Nuveen Municipal High or generate 23.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.59% |
| Values | Daily Returns |
Blackrock Muni Intermediate vs. Nuveen Municipal High
Performance |
| Timeline |
| Blackrock Muni Inter |
| Nuveen Municipal High |
Blackrock Muni and Nuveen Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Blackrock Muni and Nuveen Municipal
The main advantage of trading using opposite Blackrock Muni and Nuveen Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blackrock Muni position performs unexpectedly, Nuveen 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 Nuveen Municipal will offset losses from the drop in Nuveen 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 |
| Nuveen Municipal vs. Principal Lifetime Hybrid | Nuveen Municipal vs. Calvert Moderate Allocation | Nuveen Municipal vs. Balanced Allocation Fund | Nuveen Municipal vs. Washington Mutual Investors |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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