Correlation Between Invesco Municipal and BlackRock Credit
Can any of the company-specific risk be diversified away by investing in both Invesco Municipal and BlackRock Credit 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 Credit into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Invesco Municipal Trust and BlackRock Credit Allocation, you can compare the effects of market volatilities on Invesco Municipal and BlackRock Credit 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 Credit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco Municipal and BlackRock Credit.
Diversification Opportunities for Invesco Municipal and BlackRock Credit
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Invesco and BlackRock is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Municipal Trust and BlackRock Credit Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BlackRock Credit All 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 Trust are associated (or correlated) with BlackRock Credit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BlackRock Credit All has no effect on the direction of Invesco Municipal i.e., Invesco Municipal and BlackRock Credit go up and down completely randomly.
Pair Corralation between Invesco Municipal and BlackRock Credit
Considering the 90-day investment horizon Invesco Municipal is expected to generate 1.31 times less return on investment than BlackRock Credit. In addition to that, Invesco Municipal is 1.0 times more volatile than BlackRock Credit Allocation. It trades about 0.07 of its total potential returns per unit of risk. BlackRock Credit Allocation is currently generating about 0.09 per unit of volatility. If you would invest 881.00 in BlackRock Credit Allocation on August 31, 2024 and sell it today you would earn a total of 217.00 from holding BlackRock Credit Allocation or generate 24.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Invesco Municipal Trust vs. BlackRock Credit Allocation
Performance |
| Timeline |
| Invesco Municipal Trust |
| BlackRock Credit All |
Invesco Municipal and BlackRock Credit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco Municipal and BlackRock Credit
The main advantage of trading using opposite Invesco Municipal and BlackRock Credit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco Municipal position performs unexpectedly, BlackRock Credit 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 Credit will offset losses from the drop in BlackRock Credit's long position.| Invesco Municipal vs. Invesco Trust For | Invesco Municipal vs. Invesco Quality Municipal | Invesco Municipal vs. Invesco Municipal Opportunity | Invesco Municipal vs. MFS High Income |
| BlackRock Credit vs. Pimco Corporate Income | BlackRock Credit vs. Pimco Income Strategy | BlackRock Credit vs. Pcm Fund | BlackRock Credit vs. Pimco High Income |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
Other Complementary Tools
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals |