Correlation Between Blackrock Muni and Blackrock Muniyield

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

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

Diversification Opportunities for Blackrock Muni and Blackrock Muniyield

0.28

Correlation Coefficient

Blackrock Muni  Blackrock Muniyield

Modest diversification

The 3 months correlation between Blackrock and Blackrock is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Blackrock Muni Intermediate and Blackrock Muniyield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Muniyield and Blackrock Muni 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 Muni Intermediate 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 Blackrock Muni i.e., Blackrock Muni and Blackrock Muniyield go up and down completely randomly.

Pair Corralation between Blackrock Muni and Blackrock Muniyield

Considering the 90-day investment horizon Blackrock Muni is expected to generate 1.04 times less return on investment than Blackrock Muniyield. But when comparing it to its historical volatility, Blackrock Muni Intermediate is 1.24 times less risky than Blackrock Muniyield. It trades about 0.1 of its potential returns per unit of risk. Blackrock Muniyield is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  1,106  in Blackrock Muniyield on September 3, 2024 and sell it today you would earn a total of  38.00  from holding Blackrock Muniyield or generate 3.44% return on investment over 90 days.

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

Blackrock Muni Intermediate  vs.  Blackrock Muniyield

Blackrock Muni Inter

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Blackrock Muni Intermediate are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. Despite fairly strong basic indicators, Blackrock Muni is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Blackrock Muniyield

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Blackrock Muniyield are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of rather sound basic indicators, Blackrock Muniyield is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Blackrock Muni and Blackrock Muniyield

The main advantage of trading using opposite Blackrock Muni and Blackrock Muniyield positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blackrock Muni 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 Blackrock Muni Intermediate and Blackrock Muniyield 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.