Correlation Between Azimut Holding and BlackRock Municipal

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Can any of the company-specific risk be diversified away by investing in both Azimut Holding and BlackRock Municipal 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 Azimut Holding and BlackRock Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Azimut Holding SpA and BlackRock Municipal Income, you can compare the effects of market volatilities on Azimut Holding and BlackRock Municipal 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 Azimut Holding with a short position of BlackRock Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Azimut Holding and BlackRock Municipal.

Diversification Opportunities for Azimut Holding and BlackRock Municipal

-0.07
  Correlation Coefficient

Good diversification

The 3 months correlation between Azimut and BlackRock is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Azimut Holding SpA and BlackRock Municipal Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BlackRock Municipal and Azimut Holding 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 Azimut Holding SpA are associated (or correlated) with BlackRock Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BlackRock Municipal has no effect on the direction of Azimut Holding i.e., Azimut Holding and BlackRock Municipal go up and down completely randomly.

Pair Corralation between Azimut Holding and BlackRock Municipal

Assuming the 90 days horizon Azimut Holding SpA is expected to under-perform the BlackRock Municipal. In addition to that, Azimut Holding is 5.3 times more volatile than BlackRock Municipal Income. It trades about -0.08 of its total potential returns per unit of risk. BlackRock Municipal Income is currently generating about -0.4 per unit of volatility. If you would invest  1,039  in BlackRock Municipal Income on October 4, 2024 and sell it today you would lose (46.99) from holding BlackRock Municipal Income or give up 4.52% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy95.45%
ValuesDaily Returns

Azimut Holding SpA  vs.  BlackRock Municipal Income

 Performance 
       Timeline  
Azimut Holding SpA 

Risk-Adjusted Performance

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Very Weak
Over the last 90 days Azimut Holding SpA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Stock's technical indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.
BlackRock Municipal 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days BlackRock Municipal Income has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent technical and fundamental indicators, BlackRock Municipal is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Azimut Holding and BlackRock Municipal Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Azimut Holding and BlackRock Municipal

The main advantage of trading using opposite Azimut Holding and BlackRock Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Azimut Holding position performs unexpectedly, BlackRock Municipal 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 Municipal will offset losses from the drop in BlackRock Municipal's long position.
The idea behind Azimut Holding SpA and BlackRock Municipal Income 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..

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