Correlation Between Invesco Municipal and Blackrock Muniholdings
Can any of the company-specific risk be diversified away by investing in both Invesco Municipal and Blackrock Muniholdings 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 Invesco Municipal and Blackrock Muniholdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Invesco Municipal Income and Blackrock Muniholdings Closed, you can compare the effects of market volatilities on Invesco Municipal and Blackrock Muniholdings 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 Invesco Municipal with a short position of Blackrock Muniholdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco Municipal and Blackrock Muniholdings.
Diversification Opportunities for Invesco Municipal and Blackrock Muniholdings
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Invesco and Blackrock is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Municipal Income and Blackrock Muniholdings Closed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Muniholdings and Invesco Municipal 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 Invesco Municipal Income are associated (or correlated) with Blackrock Muniholdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock Muniholdings has no effect on the direction of Invesco Municipal i.e., Invesco Municipal and Blackrock Muniholdings go up and down completely randomly.
Pair Corralation between Invesco Municipal and Blackrock Muniholdings
Considering the 90-day investment horizon Invesco Municipal is expected to generate 1.18 times less return on investment than Blackrock Muniholdings. In addition to that, Invesco Municipal is 1.25 times more volatile than Blackrock Muniholdings Closed. It trades about 0.09 of its total potential returns per unit of risk. Blackrock Muniholdings Closed is currently generating about 0.14 per unit of volatility. If you would invest 1,146 in Blackrock Muniholdings Closed on September 1, 2024 and sell it today you would earn a total of 113.00 from holding Blackrock Muniholdings Closed or generate 9.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Invesco Municipal Income vs. Blackrock Muniholdings Closed
Performance |
| Timeline |
| Invesco Municipal Income |
| Blackrock Muniholdings |
Invesco Municipal and Blackrock Muniholdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco Municipal and Blackrock Muniholdings
The main advantage of trading using opposite Invesco Municipal and Blackrock Muniholdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco Municipal position performs unexpectedly, Blackrock Muniholdings 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 Muniholdings will offset losses from the drop in Blackrock Muniholdings' long position.| Invesco Municipal vs. DWS Municipal Income | Invesco Municipal vs. MFS Municipal Income | Invesco Municipal vs. MFS High Income | Invesco Municipal vs. Blackrock Muniyield |
| Blackrock Muniholdings vs. MFS Investment Grade | Blackrock Muniholdings vs. Eaton Vance Municipal | Blackrock Muniholdings vs. DTF Tax Free | Blackrock Muniholdings vs. Aquagold International |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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