Correlation Between IHIT and Blackrock Muniyield

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

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

Diversification Opportunities for IHIT and Blackrock Muniyield

0.0

Correlation Coefficient

IHIT  Blackrock Muniyield

Pay attention - limited upside

The 3 months correlation between IHIT and Blackrock is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding IHIT and Blackrock Muniyield Quality in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Muniyield and IHIT 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 IHIT are associated (or correlated) with Blackrock Muniyield. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock Muniyield has no effect on the direction of IHIT i.e., IHIT and Blackrock Muniyield go up and down completely randomly.

Pair Corralation between IHIT and Blackrock Muniyield

If you would invest  1,127  in Blackrock Muniyield Quality on December 28, 2024 and sell it today you would earn a total of  44.00  from holding Blackrock Muniyield Quality or generate 3.9% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

IHIT  vs.  Blackrock Muniyield Quality

IHIT

Risk-Adjusted Performance

Very Weak

Over the last 90 days IHIT has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable forward indicators, IHIT is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Blackrock Muniyield

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Blackrock Muniyield Quality are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Blackrock Muniyield is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with IHIT and Blackrock Muniyield

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

The idea behind IHIT and Blackrock Muniyield Quality 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.