Correlation Between Blackrock Muniholdings and SPDR Bloomberg

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

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

Diversification Opportunities for Blackrock Muniholdings and SPDR Bloomberg

-0.14

Correlation Coefficient

Blackrock Muniholdings  SPDR Bloomberg

Good diversification

The 3 months correlation between Blackrock and SPDR is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Blackrock Muniholdings Closed and SPDR Bloomberg Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Bloomberg Short and Blackrock Muniholdings 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 Blackrock Muniholdings Closed are associated (or correlated) with SPDR Bloomberg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Bloomberg Short has no effect on the direction of Blackrock Muniholdings i.e., Blackrock Muniholdings and SPDR Bloomberg go up and down completely randomly.

Pair Corralation between Blackrock Muniholdings and SPDR Bloomberg

Considering the 90-day investment horizon Blackrock Muniholdings Closed is expected to generate 2.51 times more return on investment than SPDR Bloomberg. However, Blackrock Muniholdings is 2.51 times more volatile than SPDR Bloomberg Short. It trades about 0.07 of its potential returns per unit of risk. SPDR Bloomberg Short is currently generating about 0.16 per unit of risk. If you would invest  1,098  in Blackrock Muniholdings Closed on September 12, 2024 and sell it today you would earn a total of  164.00  from holding Blackrock Muniholdings Closed or generate 14.94% return on investment over 90 days.

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

Blackrock Muniholdings Closed  vs.  SPDR Bloomberg Short

Blackrock Muniholdings

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Blackrock Muniholdings Closed has generated negative risk-adjusted returns adding no value to fund investors. In spite of rather sound technical indicators, Blackrock Muniholdings is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

SPDR Bloomberg Short

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in SPDR Bloomberg Short are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, SPDR Bloomberg is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Blackrock Muniholdings and SPDR Bloomberg

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

The idea behind Blackrock Muniholdings Closed and SPDR Bloomberg Short 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.