Correlation Between Municipal Bond and Blackrock
Can any of the company-specific risk be diversified away by investing in both Municipal Bond 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 Municipal Bond and Blackrock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Municipal Bond Fund and Blackrock Government Bond, you can compare the effects of market volatilities on Municipal Bond 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 Municipal Bond with a short position of Blackrock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Municipal Bond and Blackrock.
Diversification Opportunities for Municipal Bond and Blackrock
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Municipal and Blackrock is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Municipal Bond Fund and Blackrock Government Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Government Bond and Municipal Bond 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 Municipal Bond Fund 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 Government Bond has no effect on the direction of Municipal Bond i.e., Municipal Bond and Blackrock go up and down completely randomly.
Pair Corralation between Municipal Bond and Blackrock
Assuming the 90 days horizon Municipal Bond is expected to generate 1.2 times less return on investment than Blackrock. But when comparing it to its historical volatility, Municipal Bond Fund is 1.8 times less risky than Blackrock. It trades about 0.14 of its potential returns per unit of risk. Blackrock Government Bond is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 879.00 in Blackrock Government Bond on September 1, 2024 and sell it today you would earn a total of 36.00 from holding Blackrock Government Bond or generate 4.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.21% |
| Values | Daily Returns |
Municipal Bond Fund vs. Blackrock Government Bond
Performance |
| Timeline |
| Municipal Bond |
| Blackrock Government Bond |
Municipal Bond and Blackrock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Municipal Bond and Blackrock
The main advantage of trading using opposite Municipal Bond and Blackrock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Municipal Bond 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.| Municipal Bond vs. Goldman Sachs Emerging | Municipal Bond vs. Harbor Diversified International | Municipal Bond vs. Transamerica Emerging Markets | Municipal Bond vs. Rbc Emerging Markets |
| Blackrock vs. Blackrock High Yield | Blackrock vs. Fidelity Capital Income | Blackrock vs. Prudential Short Duration | Blackrock vs. Gmo 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
Other Complementary Tools
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets |