Correlation Between BlackRock Intermediate and VanEck Short

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

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

Diversification Opportunities for BlackRock Intermediate and VanEck Short

0.5

Correlation Coefficient

BlackRock Intermediate  VanEck Short

Very weak diversification

The 3 months correlation between BlackRock and VanEck is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding BlackRock Intermediate Muni and VanEck Short High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck Short High and BlackRock Intermediate 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 Intermediate Muni are associated (or correlated) with VanEck Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck Short High has no effect on the direction of BlackRock Intermediate i.e., BlackRock Intermediate and VanEck Short go up and down completely randomly.

Pair Corralation between BlackRock Intermediate and VanEck Short

Given the investment horizon of 90 days BlackRock Intermediate Muni is expected to under-perform the VanEck Short. In addition to that, BlackRock Intermediate is 1.01 times more volatile than VanEck Short High. It trades about -0.04 of its total potential returns per unit of risk. VanEck Short High is currently generating about -0.01 per unit of volatility. If you would invest  2,263  in VanEck Short High on September 26, 2024 and sell it today you would lose (5.00) from holding VanEck Short High or give up 0.22% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

BlackRock Intermediate Muni  vs.  VanEck Short High

BlackRock Intermediate

Risk-Adjusted Performance

0 of 100

Very Weak

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

VanEck Short High

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days VanEck Short High has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, VanEck Short is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with BlackRock Intermediate and VanEck Short

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

The idea behind BlackRock Intermediate Muni and VanEck Short High 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.