Correlation Between Invesco Municipal and Blackrock Muniyield
Can any of the company-specific risk be diversified away by investing in both Invesco Municipal 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 Invesco Municipal and Blackrock Muniyield 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 Muniyield Quality, you can compare the effects of market volatilities on Invesco Municipal 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 Invesco Municipal with a short position of Blackrock Muniyield. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco Municipal and Blackrock Muniyield.
Diversification Opportunities for Invesco Municipal and Blackrock Muniyield
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Invesco and Blackrock is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Municipal Income and Blackrock Muniyield Quality in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Muniyield 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 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 Invesco Municipal i.e., Invesco Municipal and Blackrock Muniyield go up and down completely randomly.
Pair Corralation between Invesco Municipal and Blackrock Muniyield
Considering the 90-day investment horizon Invesco Municipal is expected to generate 9.72 times less return on investment than Blackrock Muniyield. In addition to that, Invesco Municipal is 1.29 times more volatile than Blackrock Muniyield Quality. It trades about 0.01 of its total potential returns per unit of risk. Blackrock Muniyield Quality is currently generating about 0.18 per unit of volatility. If you would invest 1,014 in Blackrock Muniyield Quality on November 28, 2024 and sell it today you would earn a total of 21.00 from holding Blackrock Muniyield Quality or generate 2.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Invesco Municipal Income vs. Blackrock Muniyield Quality
Performance |
| Timeline |
| Invesco Municipal Income |
| Blackrock Muniyield |
Invesco Municipal and Blackrock Muniyield Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco Municipal and Blackrock Muniyield
The main advantage of trading using opposite Invesco Municipal and Blackrock Muniyield positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco Municipal 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.| Invesco Municipal vs. DWS Municipal Income | Invesco Municipal vs. MFS Municipal Income | Invesco Municipal vs. MFS High Income | Invesco Municipal vs. Blackrock Muniyield |
| Blackrock Muniyield vs. John Hancock Income | Blackrock Muniyield vs. MFS High Income | Blackrock Muniyield vs. MFS Investment Grade | Blackrock Muniyield vs. Blackrock Muniholdings Closed |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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