Correlation Between CBH and Blackrock Muniyield

Can any of the company-specific risk be diversified away by investing in both CBH 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 CBH and Blackrock Muniyield into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CBH and Blackrock Muniyield Quality, you can compare the effects of market volatilities on CBH 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 CBH with a short position of Blackrock Muniyield. Check out your portfolio center. Please also check ongoing floating volatility patterns of CBH and Blackrock Muniyield.

Diversification Opportunities for CBH and Blackrock Muniyield

-0.63

Correlation Coefficient

CBH  Blackrock Muniyield

Excellent diversification

The 3 months correlation between CBH and Blackrock is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding CBH and Blackrock Muniyield Quality in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Muniyield and CBH 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 CBH 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 CBH i.e., CBH and Blackrock Muniyield go up and down completely randomly.

Pair Corralation between CBH and Blackrock Muniyield

If you would invest  919.00  in CBH on September 21, 2024 and sell it today you would earn a total of  0.00  from holding CBH or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	1.59%
Values	Daily Returns

CBH  vs.  Blackrock Muniyield Quality

CBH

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CBH has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong fundamental drivers, CBH is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Blackrock Muniyield

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Blackrock Muniyield Quality has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest fragile performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with CBH and Blackrock Muniyield

The main advantage of trading using opposite CBH and Blackrock Muniyield positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CBH 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.

The idea behind CBH and Blackrock Muniyield Quality pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.