Correlation Between Blackrock Muniyield and Invesco Pennsylvania
Can any of the company-specific risk be diversified away by investing in both Blackrock Muniyield and Invesco Pennsylvania 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 Pennsylvania into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Blackrock Muniyield New and Invesco Pennsylvania Value, you can compare the effects of market volatilities on Blackrock Muniyield and Invesco Pennsylvania 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 Pennsylvania. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackrock Muniyield and Invesco Pennsylvania.
Diversification Opportunities for Blackrock Muniyield and Invesco Pennsylvania
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between BlackRock and Invesco is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Blackrock Muniyield New and Invesco Pennsylvania Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Pennsylvania 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 New are associated (or correlated) with Invesco Pennsylvania. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Pennsylvania has no effect on the direction of Blackrock Muniyield i.e., Blackrock Muniyield and Invesco Pennsylvania go up and down completely randomly.
Pair Corralation between Blackrock Muniyield and Invesco Pennsylvania
Considering the 90-day investment horizon Blackrock Muniyield New is expected to generate 1.39 times more return on investment than Invesco Pennsylvania. However, Blackrock Muniyield is 1.39 times more volatile than Invesco Pennsylvania Value. It trades about 0.28 of its potential returns per unit of risk. Invesco Pennsylvania Value is currently generating about 0.23 per unit of risk. If you would invest 1,025 in Blackrock Muniyield New on September 5, 2024 and sell it today you would earn a total of 44.00 from holding Blackrock Muniyield New or generate 4.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Blackrock Muniyield New vs. Invesco Pennsylvania Value
Performance |
| Timeline |
| Blackrock Muniyield New |
| Invesco Pennsylvania |
Blackrock Muniyield and Invesco Pennsylvania Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Blackrock Muniyield and Invesco Pennsylvania
The main advantage of trading using opposite Blackrock Muniyield and Invesco Pennsylvania positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blackrock Muniyield position performs unexpectedly, Invesco Pennsylvania 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 Pennsylvania will offset losses from the drop in Invesco Pennsylvania's long position.| Blackrock Muniyield vs. Invesco Pennsylvania Value | Blackrock Muniyield vs. Blackrock Muniholdings Ny | Blackrock Muniyield vs. Eaton Vance National | Blackrock Muniyield vs. Nuveen Amt Free Municipal |
| Invesco Pennsylvania vs. Pimco New York | Invesco Pennsylvania vs. Blackrock Muniholdings Ny | Invesco Pennsylvania vs. Eaton Vance National | Invesco Pennsylvania vs. Nuveen New York |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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