Correlation Between BlackRock Municipal and Blackstone Gso

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

By analyzing existing cross correlation between BlackRock Municipal Income and Blackstone Gso Long, you can compare the effects of market volatilities on BlackRock Municipal and Blackstone Gso 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 Municipal with a short position of Blackstone Gso. Check out your portfolio center. Please also check ongoing floating volatility patterns of BlackRock Municipal and Blackstone Gso.

Diversification Opportunities for BlackRock Municipal and Blackstone Gso

0.06

Correlation Coefficient

BlackRock Municipal  Blackstone Gso

Significant diversification

The 3 months correlation between BlackRock and Blackstone is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding BlackRock Municipal Income and Blackstone Gso Long in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackstone Gso Long and BlackRock Municipal 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 Municipal Income are associated (or correlated) with Blackstone Gso. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackstone Gso Long has no effect on the direction of BlackRock Municipal i.e., BlackRock Municipal and Blackstone Gso go up and down completely randomly.

Pair Corralation between BlackRock Municipal and Blackstone Gso

Considering the 90-day investment horizon BlackRock Municipal Income is expected to under-perform the Blackstone Gso. But the stock apears to be less risky and, when comparing its historical volatility, BlackRock Municipal Income is 1.09 times less risky than Blackstone Gso. The stock trades about 0.0 of its potential returns per unit of risk. The Blackstone Gso Long is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  1,261  in Blackstone Gso Long on September 1, 2024 and sell it today you would earn a total of  26.00  from holding Blackstone Gso Long or generate 2.06% return on investment over 90 days.

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

BlackRock Municipal Income  vs.  Blackstone Gso Long

BlackRock Municipal

Risk-Adjusted Performance

0 of 100

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.

Blackstone Gso Long

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Blackstone Gso Long are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Blackstone Gso is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with BlackRock Municipal and Blackstone Gso

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

The idea behind BlackRock Municipal Income and Blackstone Gso Long 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 Global Correlations module to find global opportunities by holding instruments from different markets.