Correlation Between XAI Octagon and Blackrock Muniyield
Can any of the company-specific risk be diversified away by investing in both XAI Octagon 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 XAI Octagon and Blackrock Muniyield into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between XAI Octagon Floating and Blackrock Muniyield Quality, you can compare the effects of market volatilities on XAI Octagon 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 XAI Octagon with a short position of Blackrock Muniyield. Check out your portfolio center. Please also check ongoing floating volatility patterns of XAI Octagon and Blackrock Muniyield.
Diversification Opportunities for XAI Octagon and Blackrock Muniyield
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between XAI and Blackrock is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding XAI Octagon Floating and Blackrock Muniyield Quality in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Muniyield and XAI Octagon 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 XAI Octagon Floating 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 XAI Octagon i.e., XAI Octagon and Blackrock Muniyield go up and down completely randomly.
Pair Corralation between XAI Octagon and Blackrock Muniyield
Given the investment horizon of 90 days XAI Octagon is expected to generate 1.72 times less return on investment than Blackrock Muniyield. But when comparing it to its historical volatility, XAI Octagon Floating is 1.43 times less risky than Blackrock Muniyield. It trades about 0.11 of its potential returns per unit of risk. Blackrock Muniyield Quality is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 979.00 in Blackrock Muniyield Quality on September 3, 2024 and sell it today you would earn a total of 89.00 from holding Blackrock Muniyield Quality or generate 9.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
XAI Octagon Floating vs. Blackrock Muniyield Quality
Performance |
| Timeline |
| XAI Octagon Floating |
| Blackrock Muniyield |
XAI Octagon and Blackrock Muniyield Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with XAI Octagon and Blackrock Muniyield
The main advantage of trading using opposite XAI Octagon and Blackrock Muniyield positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if XAI Octagon 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.| XAI Octagon vs. Oxford Lane Capital | XAI Octagon vs. Capital Southwest | XAI Octagon vs. Cornerstone Strategic Return | XAI Octagon vs. Cornerstone Strategic Value |
| Blackrock Muniyield vs. Tekla Healthcare Investors | Blackrock Muniyield vs. Tekla Life Sciences | Blackrock Muniyield vs. Cohen Steers Reit | Blackrock Muniyield vs. XAI Octagon Floating |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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