Correlation Between Blackrock Muniyield and Invesco Municipal
Can any of the company-specific risk be diversified away by investing in both Blackrock Muniyield and Invesco 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 Muniyield and Invesco Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Blackrock Muniyield and Invesco Municipal Income, you can compare the effects of market volatilities on Blackrock Muniyield and Invesco 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 Muniyield with a short position of Invesco Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackrock Muniyield and Invesco Municipal.
Diversification Opportunities for Blackrock Muniyield and Invesco Municipal
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Blackrock and Invesco is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Blackrock Muniyield and Invesco Municipal Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Municipal Income and Blackrock Muniyield 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 Muniyield are associated (or correlated) with Invesco Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Municipal Income has no effect on the direction of Blackrock Muniyield i.e., Blackrock Muniyield and Invesco Municipal go up and down completely randomly.
Pair Corralation between Blackrock Muniyield and Invesco Municipal
Considering the 90-day investment horizon Blackrock Muniyield is expected to generate 0.83 times more return on investment than Invesco Municipal. However, Blackrock Muniyield is 1.2 times less risky than Invesco Municipal. It trades about 0.15 of its potential returns per unit of risk. Invesco Municipal Income is currently generating about 0.09 per unit of risk. If you would invest 1,028 in Blackrock Muniyield on September 1, 2024 and sell it today you would earn a total of 116.00 from holding Blackrock Muniyield or generate 11.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Blackrock Muniyield vs. Invesco Municipal Income
Performance |
| Timeline |
| Blackrock Muniyield |
| Invesco Municipal Income |
Blackrock Muniyield and Invesco Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Blackrock Muniyield and Invesco Municipal
The main advantage of trading using opposite Blackrock Muniyield and Invesco Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blackrock Muniyield position performs unexpectedly, Invesco 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 Invesco Municipal will offset losses from the drop in Invesco Municipal's long position.| Blackrock Muniyield vs. MFS Investment Grade | Blackrock Muniyield vs. Eaton Vance Municipal | Blackrock Muniyield vs. DTF Tax Free | Blackrock Muniyield vs. Aquagold International |
| Invesco Municipal vs. DWS Municipal Income | Invesco Municipal vs. MFS Municipal Income | Invesco Municipal vs. MFS High Income | Invesco Municipal vs. Blackrock Muniyield |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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