Correlation Between Blackrock Muniholdings and Central Europe

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

By analyzing existing cross correlation between Blackrock Muniholdings Quality and Central Europe Russia, you can compare the effects of market volatilities on Blackrock Muniholdings and Central Europe 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 Central Europe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackrock Muniholdings and Central Europe.

Diversification Opportunities for Blackrock Muniholdings and Central Europe

0.09

Correlation Coefficient

Blackrock Muniholdings  Central Europe

Significant diversification

The 3 months correlation between Blackrock and Central is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Blackrock Muniholdings Quality and Central Europe Russia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Central Europe Russia 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 Quality are associated (or correlated) with Central Europe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Central Europe Russia has no effect on the direction of Blackrock Muniholdings i.e., Blackrock Muniholdings and Central Europe go up and down completely randomly.

Pair Corralation between Blackrock Muniholdings and Central Europe

Considering the 90-day investment horizon Blackrock Muniholdings is expected to generate 3.42 times less return on investment than Central Europe. But when comparing it to its historical volatility, Blackrock Muniholdings Quality is 3.28 times less risky than Central Europe. It trades about 0.12 of its potential returns per unit of risk. Central Europe Russia is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  1,037  in Central Europe Russia on September 2, 2024 and sell it today you would earn a total of  151.00  from holding Central Europe Russia or generate 14.56% return on investment over 90 days.

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

Blackrock Muniholdings Quality  vs.  Central Europe Russia

Blackrock Muniholdings

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Blackrock Muniholdings Quality are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of rather sound basic indicators, Blackrock Muniholdings is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Central Europe Russia

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Central Europe Russia are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of rather fragile technical and fundamental indicators, Central Europe exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Blackrock Muniholdings and Central Europe

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

The idea behind Blackrock Muniholdings Quality and Central Europe Russia 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.