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 Opportunity and Blackrock Muniholdings Ny, 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
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Invesco and Blackrock is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Municipal Opportunity and Blackrock Muniholdings Ny 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 Opportunity 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 Opportunity is expected to generate 1.15 times more return on investment than Blackrock Muniholdings. However, Invesco Municipal is 1.15 times more volatile than Blackrock Muniholdings Ny. It trades about 0.05 of its potential returns per unit of risk. Blackrock Muniholdings Ny is currently generating about 0.05 per unit of risk. If you would invest 865.00 in Invesco Municipal Opportunity on September 3, 2024 and sell it today you would earn a total of 150.00 from holding Invesco Municipal Opportunity or generate 17.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Invesco Municipal Opportunity vs. Blackrock Muniholdings Ny
Performance |
| Timeline |
| Invesco Municipal |
| 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. Invesco Quality Municipal | Invesco Municipal vs. Invesco Advantage MIT | Invesco Municipal vs. Invesco Municipal Trust | Invesco Municipal vs. Invesco California Value |
| Blackrock Muniholdings vs. Eaton Vance National | Blackrock Muniholdings vs. Invesco High Income | Blackrock Muniholdings vs. Nuveen California Select | Blackrock Muniholdings vs. MFS Investment Grade |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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