Correlation Between Horizon Technology and Blackrock Muniyield

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

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

Diversification Opportunities for Horizon Technology and Blackrock Muniyield

0.29

Correlation Coefficient

Horizon Technology  Blackrock Muniyield

Modest diversification

The 3 months correlation between Horizon and BlackRock is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Horizon Technology Finance and Blackrock Muniyield Mi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Muniyield and Horizon Technology 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 Horizon Technology Finance 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 Horizon Technology i.e., Horizon Technology and Blackrock Muniyield go up and down completely randomly.

Pair Corralation between Horizon Technology and Blackrock Muniyield

Given the investment horizon of 90 days Horizon Technology Finance is expected to under-perform the Blackrock Muniyield. In addition to that, Horizon Technology is 1.72 times more volatile than Blackrock Muniyield Mi. It trades about -0.21 of its total potential returns per unit of risk. Blackrock Muniyield Mi is currently generating about 0.08 per unit of volatility. If you would invest  1,160  in Blackrock Muniyield Mi on September 5, 2024 and sell it today you would earn a total of  35.00  from holding Blackrock Muniyield Mi or generate 3.02% return on investment over 90 days.

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

Horizon Technology Finance  vs.  Blackrock Muniyield Mi

Horizon Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Horizon Technology Finance has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Blackrock Muniyield

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Blackrock Muniyield Mi are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Blackrock Muniyield is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Horizon Technology and Blackrock Muniyield

The main advantage of trading using opposite Horizon Technology and Blackrock Muniyield positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Horizon Technology 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 Horizon Technology Finance and Blackrock Muniyield Mi 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.