Correlation Between Federated Ohio and Blackrock
Can any of the company-specific risk be diversified away by investing in both Federated Ohio and Blackrock 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 Federated Ohio and Blackrock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federated Ohio Municipal and Blackrock Hi Yld, you can compare the effects of market volatilities on Federated Ohio and Blackrock 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 Federated Ohio with a short position of Blackrock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Ohio and Blackrock.
Diversification Opportunities for Federated Ohio and Blackrock
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Federated and Blackrock is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Federated Ohio Municipal and Blackrock Hi Yld in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Hi Yld and Federated Ohio 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 Federated Ohio Municipal are associated (or correlated) with Blackrock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock Hi Yld has no effect on the direction of Federated Ohio i.e., Federated Ohio and Blackrock go up and down completely randomly.
Pair Corralation between Federated Ohio and Blackrock
Assuming the 90 days horizon Federated Ohio is expected to generate 1.91 times less return on investment than Blackrock. But when comparing it to its historical volatility, Federated Ohio Municipal is 1.08 times less risky than Blackrock. It trades about 0.1 of its potential returns per unit of risk. Blackrock Hi Yld is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 676.00 in Blackrock Hi Yld on September 3, 2024 and sell it today you would earn a total of 44.00 from holding Blackrock Hi Yld or generate 6.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federated Ohio Municipal vs. Blackrock Hi Yld
Performance |
| Timeline |
| Federated Ohio Municipal |
| Blackrock Hi Yld |
Federated Ohio and Blackrock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Ohio and Blackrock
The main advantage of trading using opposite Federated Ohio and Blackrock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Ohio position performs unexpectedly, Blackrock 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 will offset losses from the drop in Blackrock's long position.| Federated Ohio vs. Gmo Resources | Federated Ohio vs. Fidelity Advisor Energy | Federated Ohio vs. Calvert Global Energy | Federated Ohio vs. Energy Basic Materials |
| Blackrock vs. Vanguard High Yield Corporate | Blackrock vs. Vanguard High Yield Porate | Blackrock vs. Blackrock Hi Yld | Blackrock vs. Blackrock High Yield |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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