Correlation Between Golub Capital and Blackrock Muniholdings

Can any of the company-specific risk be diversified away by investing in both Golub Capital and Blackrock Muniholdings 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 Golub Capital and Blackrock Muniholdings into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Golub Capital BDC and Blackrock Muniholdings Ca, you can compare the effects of market volatilities on Golub Capital and Blackrock Muniholdings 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 Golub Capital with a short position of Blackrock Muniholdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golub Capital and Blackrock Muniholdings.

Diversification Opportunities for Golub Capital and Blackrock Muniholdings

0.2

Correlation Coefficient

Golub Capital  Blackrock Muniholdings

Modest diversification

The 3 months correlation between Golub and Blackrock is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Golub Capital BDC and Blackrock Muniholdings Ca in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Muniholdings and Golub Capital 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 Golub Capital BDC are associated (or correlated) with Blackrock Muniholdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock Muniholdings has no effect on the direction of Golub Capital i.e., Golub Capital and Blackrock Muniholdings go up and down completely randomly.

Pair Corralation between Golub Capital and Blackrock Muniholdings

Given the investment horizon of 90 days Golub Capital BDC is expected to under-perform the Blackrock Muniholdings. In addition to that, Golub Capital is 1.54 times more volatile than Blackrock Muniholdings Ca. It trades about -0.11 of its total potential returns per unit of risk. Blackrock Muniholdings Ca is currently generating about 0.22 per unit of volatility. If you would invest  1,083  in Blackrock Muniholdings Ca on December 4, 2024 and sell it today you would earn a total of  24.00  from holding Blackrock Muniholdings Ca or generate 2.22% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.24%
Values	Daily Returns

Golub Capital BDC  vs.  Blackrock Muniholdings Ca

Golub Capital BDC

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Golub Capital BDC are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, Golub Capital is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Blackrock Muniholdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Blackrock Muniholdings Ca has generated negative risk-adjusted returns adding no value to fund investors. In spite of rather sound basic indicators, Blackrock Muniholdings is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Golub Capital and Blackrock Muniholdings

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

The idea behind Golub Capital BDC and Blackrock Muniholdings Ca 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.