Correlation Between BlackRock Municipal and Juniata Valley

Can any of the company-specific risk be diversified away by investing in both BlackRock Municipal and Juniata Valley 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 Juniata Valley 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 Juniata Valley Financial, you can compare the effects of market volatilities on BlackRock Municipal and Juniata Valley 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 Juniata Valley. Check out your portfolio center. Please also check ongoing floating volatility patterns of BlackRock Municipal and Juniata Valley.

Diversification Opportunities for BlackRock Municipal and Juniata Valley

-0.54

Correlation Coefficient

BlackRock Municipal  Juniata Valley

Excellent diversification

The 3 months correlation between BlackRock and Juniata is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding BlackRock Municipal Income and Juniata Valley Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Juniata Valley Financial 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 Juniata Valley. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Juniata Valley Financial has no effect on the direction of BlackRock Municipal i.e., BlackRock Municipal and Juniata Valley go up and down completely randomly.

Pair Corralation between BlackRock Municipal and Juniata Valley

Considering the 90-day investment horizon BlackRock Municipal Income is expected to under-perform the Juniata Valley. But the stock apears to be less risky and, when comparing its historical volatility, BlackRock Municipal Income is 2.83 times less risky than Juniata Valley. The stock trades about -0.13 of its potential returns per unit of risk. The Juniata Valley Financial is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  1,276  in Juniata Valley Financial on October 9, 2024 and sell it today you would earn a total of  24.00  from holding Juniata Valley Financial or generate 1.88% return on investment over 90 days.

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

BlackRock Municipal Income  vs.  Juniata Valley Financial

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. In spite of latest fragile performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Juniata Valley Financial

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Juniata Valley Financial are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Juniata Valley reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BlackRock Municipal and Juniata Valley

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

The idea behind BlackRock Municipal Income and Juniata Valley Financial 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.

Check out your portfolio center.

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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.