Correlation Between Xp and BlackRock Municipal
Can any of the company-specific risk be diversified away by investing in both Xp and BlackRock Municipal 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 Xp and BlackRock Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xp Inc and BlackRock Municipal Income, you can compare the effects of market volatilities on Xp and BlackRock Municipal 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 Xp with a short position of BlackRock Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xp and BlackRock Municipal.
Diversification Opportunities for Xp and BlackRock Municipal
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Xp and BlackRock is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Xp Inc and BlackRock Municipal Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BlackRock Municipal and Xp 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 Xp Inc are associated (or correlated) with BlackRock Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BlackRock Municipal has no effect on the direction of Xp i.e., Xp and BlackRock Municipal go up and down completely randomly.
Pair Corralation between Xp and BlackRock Municipal
Allowing for the 90-day total investment horizon Xp Inc is expected to under-perform the BlackRock Municipal. In addition to that, Xp is 4.12 times more volatile than BlackRock Municipal Income. It trades about -0.29 of its total potential returns per unit of risk. BlackRock Municipal Income is currently generating about 0.2 per unit of volatility. If you would invest 1,136 in BlackRock Municipal Income on August 31, 2024 and sell it today you would earn a total of 35.00 from holding BlackRock Municipal Income or generate 3.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Xp Inc vs. BlackRock Municipal Income
Performance |
| Timeline |
| Xp Inc |
| BlackRock Municipal |
Xp and BlackRock Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xp and BlackRock Municipal
The main advantage of trading using opposite Xp and BlackRock Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xp position performs unexpectedly, BlackRock Municipal 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 Municipal will offset losses from the drop in BlackRock Municipal's long position.| Xp vs. Up Fintech Holding | Xp vs. Bit Digital | Xp vs. Marathon Digital Holdings | Xp vs. MarketAxess Holdings |
| BlackRock Municipal vs. HUMANA INC | BlackRock Municipal vs. SCOR PK | BlackRock Municipal vs. Aquagold International | BlackRock Municipal vs. Thrivent 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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