Correlation Between Clough Global and Blackrock Muni

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

By analyzing existing cross correlation between Clough Global Ef and Blackrock Muni Intermediate, you can compare the effects of market volatilities on Clough Global and Blackrock Muni 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 Clough Global with a short position of Blackrock Muni. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clough Global and Blackrock Muni.

Diversification Opportunities for Clough Global and Blackrock Muni

0.58

Correlation Coefficient

Clough Global  Blackrock Muni

Very weak diversification

The 3 months correlation between Clough and Blackrock is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Clough Global Ef and Blackrock Muni Intermediate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Muni Inter and Clough Global 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 Clough Global Ef are associated (or correlated) with Blackrock Muni. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock Muni Inter has no effect on the direction of Clough Global i.e., Clough Global and Blackrock Muni go up and down completely randomly.

Pair Corralation between Clough Global and Blackrock Muni

Considering the 90-day investment horizon Clough Global Ef is expected to generate 1.39 times more return on investment than Blackrock Muni. However, Clough Global is 1.39 times more volatile than Blackrock Muni Intermediate. It trades about -0.07 of its potential returns per unit of risk. Blackrock Muni Intermediate is currently generating about -0.12 per unit of risk. If you would invest  675.00  in Clough Global Ef on September 23, 2024 and sell it today you would lose (9.00) from holding Clough Global Ef or give up 1.33% of portfolio value over 90 days.

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

Clough Global Ef  vs.  Blackrock Muni Intermediate

Clough Global Ef

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Clough Global Ef has generated negative risk-adjusted returns adding no value to fund investors. Even with relatively invariable essential indicators, Clough Global is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Blackrock Muni Inter

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Blackrock Muni Intermediate are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. Despite fairly strong basic indicators, Blackrock Muni is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Clough Global and Blackrock Muni

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

The idea behind Clough Global Ef and Blackrock Muni Intermediate 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.