Correlation Between First Trust and Blackrock Munivest
Can any of the company-specific risk be diversified away by investing in both First Trust and Blackrock Munivest 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 First Trust and Blackrock Munivest into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Trust New and Blackrock Munivest, you can compare the effects of market volatilities on First Trust and Blackrock Munivest 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 First Trust with a short position of Blackrock Munivest. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Trust and Blackrock Munivest.
Diversification Opportunities for First Trust and Blackrock Munivest
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between First and Blackrock is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding First Trust New and Blackrock Munivest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Munivest and First Trust 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 First Trust New are associated (or correlated) with Blackrock Munivest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock Munivest has no effect on the direction of First Trust i.e., First Trust and Blackrock Munivest go up and down completely randomly.
Pair Corralation between First Trust and Blackrock Munivest
Considering the 90-day investment horizon First Trust New is expected to generate 1.8 times more return on investment than Blackrock Munivest. However, First Trust is 1.8 times more volatile than Blackrock Munivest. It trades about 0.06 of its potential returns per unit of risk. Blackrock Munivest is currently generating about 0.03 per unit of risk. If you would invest 581.00 in First Trust New on September 26, 2024 and sell it today you would earn a total of 57.00 from holding First Trust New or generate 9.81% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 27.82% |
Values | Daily Returns |
First Trust New vs. Blackrock Munivest
Performance |
Timeline |
First Trust New |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Blackrock Munivest |
First Trust and Blackrock Munivest Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with First Trust and Blackrock Munivest
The main advantage of trading using opposite First Trust and Blackrock Munivest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Trust position performs unexpectedly, Blackrock Munivest 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 Munivest will offset losses from the drop in Blackrock Munivest's long position.First Trust vs. Voya Global Equity | First Trust vs. Blackrock Enhanced Capital | First Trust vs. Eagle Point Income | First Trust vs. European Equity Closed |
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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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