Correlation Between Ellsworth Convertible and Blackrock Munivest

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

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

Diversification Opportunities for Ellsworth Convertible and Blackrock Munivest

-0.44

Correlation Coefficient

Ellsworth Convertible  Blackrock Munivest

Very good diversification

The 3 months correlation between Ellsworth and Blackrock is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Ellsworth Convertible Growth and Blackrock Munivest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Munivest and Ellsworth Convertible 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 Ellsworth Convertible Growth are associated (or correlated) with Blackrock Munivest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock Munivest has no effect on the direction of Ellsworth Convertible i.e., Ellsworth Convertible and Blackrock Munivest go up and down completely randomly.

Pair Corralation between Ellsworth Convertible and Blackrock Munivest

Considering the 90-day investment horizon Ellsworth Convertible Growth is expected to generate 1.26 times more return on investment than Blackrock Munivest. However, Ellsworth Convertible is 1.26 times more volatile than Blackrock Munivest. It trades about 0.31 of its potential returns per unit of risk. Blackrock Munivest is currently generating about 0.04 per unit of risk. If you would invest  848.00  in Ellsworth Convertible Growth on September 5, 2024 and sell it today you would earn a total of  145.00  from holding Ellsworth Convertible Growth or generate 17.1% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Ellsworth Convertible Growth  vs.  Blackrock Munivest

Ellsworth Convertible

Risk-Adjusted Performance

24 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Ellsworth Convertible Growth are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile fundamental indicators, Ellsworth Convertible reported solid returns over the last few months and may actually be approaching a breakup point.

Blackrock Munivest

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Blackrock Munivest are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of comparatively stable basic indicators, Blackrock Munivest is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Ellsworth Convertible and Blackrock Munivest

The main advantage of trading using opposite Ellsworth Convertible and Blackrock Munivest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ellsworth Convertible position performs unexpectedly, Blackrock Munivest 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 Munivest will offset losses from the drop in Blackrock Munivest's long position.

The idea behind Ellsworth Convertible Growth and Blackrock Munivest 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.