Correlation Between NYSE Composite and Blackrock Muniassets
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Blackrock Muniassets 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 Muniassets 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 Muniassets, you can compare the effects of market volatilities on NYSE Composite and Blackrock Muniassets 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 Muniassets. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Blackrock Muniassets.
Diversification Opportunities for NYSE Composite and Blackrock Muniassets
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between NYSE and Blackrock is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Blackrock Muniassets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Muniassets 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 Muniassets. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock Muniassets has no effect on the direction of NYSE Composite i.e., NYSE Composite and Blackrock Muniassets go up and down completely randomly.
Pair Corralation between NYSE Composite and Blackrock Muniassets
Assuming the 90 days trading horizon NYSE Composite is expected to generate 1.75 times more return on investment than Blackrock Muniassets. However, NYSE Composite is 1.75 times more volatile than Blackrock Muniassets. It trades about 0.13 of its potential returns per unit of risk. Blackrock Muniassets is currently generating about 0.02 per unit of risk. If you would invest 1,781,726 in NYSE Composite on September 12, 2024 and sell it today you would earn a total of 206,464 from holding NYSE Composite or generate 11.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Blackrock Muniassets
Performance |
| Timeline |
NYSE Composite and Blackrock Muniassets Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Blackrock Muniassets
Pair trading matchups for Blackrock Muniassets
Pair Trading with NYSE Composite and Blackrock Muniassets
The main advantage of trading using opposite NYSE Composite and Blackrock Muniassets positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Blackrock Muniassets 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 Muniassets will offset losses from the drop in Blackrock Muniassets' long position.| NYSE Composite vs. Teleflex Incorporated | NYSE Composite vs. Victorias Secret Co | NYSE Composite vs. Under Armour C | NYSE Composite vs. Steven Madden |
| Blackrock Muniassets vs. Gmo High Yield | Blackrock Muniassets vs. City National Rochdale | Blackrock Muniassets vs. Pace High Yield | Blackrock Muniassets vs. Janus High Yield 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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