Correlation Between Blackrock Natl and Gurtin National

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

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

Diversification Opportunities for Blackrock Natl and Gurtin National

0.94

Correlation Coefficient

Blackrock Natl  Gurtin National

Almost no diversification

The 3 months correlation between Blackrock and Gurtin is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Blackrock Natl Muni and Gurtin National Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gurtin National Municipal and Blackrock Natl 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 Natl Muni are associated (or correlated) with Gurtin National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gurtin National Municipal has no effect on the direction of Blackrock Natl i.e., Blackrock Natl and Gurtin National go up and down completely randomly.

Pair Corralation between Blackrock Natl and Gurtin National

Assuming the 90 days horizon Blackrock Natl is expected to generate 2.27 times less return on investment than Gurtin National. But when comparing it to its historical volatility, Blackrock Natl Muni is 1.01 times less risky than Gurtin National. It trades about 0.02 of its potential returns per unit of risk. Gurtin National Municipal is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  928.00  in Gurtin National Municipal on October 11, 2024 and sell it today you would earn a total of  47.00  from holding Gurtin National Municipal or generate 5.06% return on investment over 90 days.

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

Blackrock Natl Muni  vs.  Gurtin National Municipal

Blackrock Natl Muni

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Blackrock Natl Muni has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong essential indicators, Blackrock Natl is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Gurtin National Municipal

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gurtin National Municipal has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, Gurtin National is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Blackrock Natl and Gurtin National

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

The idea behind Blackrock Natl Muni and Gurtin National Municipal 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.