Correlation Between Standard Life and Blackrock Muniyield
Can any of the company-specific risk be diversified away by investing in both Standard Life 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 Standard Life and Blackrock Muniyield into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Standard Life Aberdeen and Blackrock Muniyield Quality, you can compare the effects of market volatilities on Standard Life 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 Standard Life with a short position of Blackrock Muniyield. Check out your portfolio center. Please also check ongoing floating volatility patterns of Standard Life and Blackrock Muniyield.
Diversification Opportunities for Standard Life and Blackrock Muniyield
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Standard and Blackrock is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Standard Life Aberdeen and Blackrock Muniyield Quality in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Muniyield and Standard Life 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 Standard Life Aberdeen 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 Standard Life i.e., Standard Life and Blackrock Muniyield go up and down completely randomly.
Pair Corralation between Standard Life and Blackrock Muniyield
Assuming the 90 days horizon Standard Life Aberdeen is expected to generate 6.52 times more return on investment than Blackrock Muniyield. However, Standard Life is 6.52 times more volatile than Blackrock Muniyield Quality. It trades about 0.01 of its potential returns per unit of risk. Blackrock Muniyield Quality is currently generating about 0.05 per unit of risk. If you would invest 847.00 in Standard Life Aberdeen on September 3, 2024 and sell it today you would lose (156.00) from holding Standard Life Aberdeen or give up 18.42% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.15% |
| Values | Daily Returns |
Standard Life Aberdeen vs. Blackrock Muniyield Quality
Performance |
| Timeline |
| Standard Life Aberdeen |
| Blackrock Muniyield |
Standard Life and Blackrock Muniyield Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Standard Life and Blackrock Muniyield
The main advantage of trading using opposite Standard Life and Blackrock Muniyield positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Standard Life 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.| Standard Life vs. Tri Continental Closed | Standard Life vs. Adams Natural Resources | Standard Life vs. Adams Diversified Equity | Standard Life vs. Schroders PLC |
| Blackrock Muniyield vs. Blackrock Muniyield | Blackrock Muniyield vs. Blackrock Muni Intermediate | Blackrock Muniyield vs. Blackrock Muniyield Quality | Blackrock Muniyield vs. Blackrock Muniholdings Quality |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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