Correlation Between Blackrock Muni and Nuveen Senior
Can any of the company-specific risk be diversified away by investing in both Blackrock Muni and Nuveen Senior 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 Senior 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 Senior Income, you can compare the effects of market volatilities on Blackrock Muni and Nuveen Senior 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 Senior. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackrock Muni and Nuveen Senior.
Diversification Opportunities for Blackrock Muni and Nuveen Senior
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Blackrock and Nuveen is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Blackrock Muni Intermediate and Nuveen Senior Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Senior Income 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 Senior. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Senior Income has no effect on the direction of Blackrock Muni i.e., Blackrock Muni and Nuveen Senior go up and down completely randomly.
Pair Corralation between Blackrock Muni and Nuveen Senior
Considering the 90-day investment horizon Blackrock Muni Intermediate is expected to generate 0.83 times more return on investment than Nuveen Senior. However, Blackrock Muni Intermediate is 1.2 times less risky than Nuveen Senior. It trades about 0.06 of its potential returns per unit of risk. Nuveen Senior Income is currently generating about 0.02 per unit of risk. If you would invest 1,060 in Blackrock Muni Intermediate on August 28, 2024 and sell it today you would earn a total of 190.00 from holding Blackrock Muni Intermediate or generate 17.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 31.72% |
| Values | Daily Returns |
Blackrock Muni Intermediate vs. Nuveen Senior Income
Performance |
| Timeline |
| Blackrock Muni Inter |
| Nuveen Senior Income |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Blackrock Muni and Nuveen Senior Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Blackrock Muni and Nuveen Senior
The main advantage of trading using opposite Blackrock Muni and Nuveen Senior positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blackrock Muni position performs unexpectedly, Nuveen Senior 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 Senior will offset losses from the drop in Nuveen Senior'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 Senior vs. Nuveen Floating Rate | Nuveen Senior vs. Pioneer Floating Rate | Nuveen Senior vs. BlackRock Floating Rate | Nuveen Senior vs. Blackrock Floating Rate |
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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