Correlation Between Blackrock Muniyield and Nuveen Amt

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

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

Diversification Opportunities for Blackrock Muniyield and Nuveen Amt

0.84

Correlation Coefficient

Blackrock Muniyield  Nuveen Amt

Very poor diversification

The 3 months correlation between Blackrock and Nuveen is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Blackrock Muniyield Quality and Nuveen Amt Free in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Amt Free and Blackrock Muniyield 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 Muniyield Quality are associated (or correlated) with Nuveen Amt. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Amt Free has no effect on the direction of Blackrock Muniyield i.e., Blackrock Muniyield and Nuveen Amt go up and down completely randomly.

Pair Corralation between Blackrock Muniyield and Nuveen Amt

Considering the 90-day investment horizon Blackrock Muniyield Quality is expected to under-perform the Nuveen Amt. But the fund apears to be less risky and, when comparing its historical volatility, Blackrock Muniyield Quality is 1.37 times less risky than Nuveen Amt. The fund trades about -0.03 of its potential returns per unit of risk. The Nuveen Amt Free is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  1,315  in Nuveen Amt Free on September 12, 2024 and sell it today you would earn a total of  7.00  from holding Nuveen Amt Free or generate 0.53% return on investment over 90 days.

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

Blackrock Muniyield Quality  vs.  Nuveen Amt Free

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 fairly strong basic indicators, Blackrock Muniyield is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Nuveen Amt Free

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Nuveen Amt Free are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. Despite nearly stable basic indicators, Nuveen Amt is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Blackrock Muniyield and Nuveen Amt

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

The idea behind Blackrock Muniyield Quality and Nuveen Amt Free 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.

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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.