Correlation Between Ishares Municipal and Blackstone Alternative

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

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

Diversification Opportunities for Ishares Municipal and Blackstone Alternative

0.05

Correlation Coefficient

Ishares Municipal  Blackstone Alternative

Significant diversification

The 3 months correlation between Ishares and Blackstone is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Ishares Municipal Bond and Blackstone Alternative Multi S in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackstone Alternative and Ishares 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 Ishares Municipal Bond are associated (or correlated) with Blackstone Alternative. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackstone Alternative has no effect on the direction of Ishares Municipal i.e., Ishares Municipal and Blackstone Alternative go up and down completely randomly.

Pair Corralation between Ishares Municipal and Blackstone Alternative

Assuming the 90 days horizon Ishares Municipal is expected to generate 22.68 times less return on investment than Blackstone Alternative. In addition to that, Ishares Municipal is 1.46 times more volatile than Blackstone Alternative Multi Strategy. It trades about 0.01 of its total potential returns per unit of risk. Blackstone Alternative Multi Strategy is currently generating about 0.22 per unit of volatility. If you would invest  1,053  in Blackstone Alternative Multi Strategy on October 25, 2024 and sell it today you would earn a total of  27.00  from holding Blackstone Alternative Multi Strategy or generate 2.56% return on investment over 90 days.

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

Ishares Municipal Bond  vs.  Blackstone Alternative Multi S

Ishares Municipal Bond

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Ishares Municipal Bond has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Ishares Municipal is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Blackstone Alternative

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Blackstone Alternative Multi Strategy are ranked lower than 17 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Blackstone Alternative is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Ishares Municipal and Blackstone Alternative

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

The idea behind Ishares Municipal Bond and Blackstone Alternative Multi Strategy 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.