Correlation Between NYSE Composite and Blackrock Muniyield
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Blackrock Muniyield 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 NYSE Composite and Blackrock Muniyield into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Blackrock Muniyield, you can compare the effects of market volatilities on NYSE Composite and Blackrock Muniyield 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 NYSE Composite with a short position of Blackrock Muniyield. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Blackrock Muniyield.
Diversification Opportunities for NYSE Composite and Blackrock Muniyield
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between NYSE and Blackrock is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Blackrock Muniyield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Muniyield and NYSE Composite 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 NYSE Composite are associated (or correlated) with Blackrock Muniyield. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock Muniyield has no effect on the direction of NYSE Composite i.e., NYSE Composite and Blackrock Muniyield go up and down completely randomly.
Pair Corralation between NYSE Composite and Blackrock Muniyield
Assuming the 90 days trading horizon NYSE Composite is expected to generate 1.12 times more return on investment than Blackrock Muniyield. However, NYSE Composite is 1.12 times more volatile than Blackrock Muniyield. It trades about 0.14 of its potential returns per unit of risk. Blackrock Muniyield is currently generating about 0.1 per unit of risk. If you would invest 1,592,915 in NYSE Composite on August 24, 2024 and sell it today you would earn a total of 403,915 from holding NYSE Composite or generate 25.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Blackrock Muniyield
Performance |
| Timeline |
NYSE Composite and Blackrock Muniyield Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Blackrock Muniyield
Pair trading matchups for Blackrock Muniyield
Pair Trading with NYSE Composite and Blackrock Muniyield
The main advantage of trading using opposite NYSE Composite and Blackrock Muniyield positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Blackrock Muniyield 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 Blackrock Muniyield will offset losses from the drop in Blackrock Muniyield's long position.| NYSE Composite vs. Awilco Drilling PLC | NYSE Composite vs. AKITA Drilling | NYSE Composite vs. SunOpta | NYSE Composite vs. Delek Drilling |
| Blackrock Muniyield vs. MFS Investment Grade | Blackrock Muniyield vs. Eaton Vance National | Blackrock Muniyield vs. Blackrock Muniyield Quality | Blackrock Muniyield vs. Munivest Fund |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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