Correlation Between Blackrock Muniholdings and VanEck International

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

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

Diversification Opportunities for Blackrock Muniholdings and VanEck International

0.56

Correlation Coefficient

Blackrock Muniholdings  VanEck International

Very weak diversification

The 3 months correlation between Blackrock and VanEck is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Blackrock Muniholdings Closed and VanEck International High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck International High and Blackrock Muniholdings 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 Muniholdings Closed are associated (or correlated) with VanEck International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck International High has no effect on the direction of Blackrock Muniholdings i.e., Blackrock Muniholdings and VanEck International go up and down completely randomly.

Pair Corralation between Blackrock Muniholdings and VanEck International

Considering the 90-day investment horizon Blackrock Muniholdings is expected to generate 1.05 times less return on investment than VanEck International. In addition to that, Blackrock Muniholdings is 1.55 times more volatile than VanEck International High. It trades about 0.05 of its total potential returns per unit of risk. VanEck International High is currently generating about 0.08 per unit of volatility. If you would invest  1,764  in VanEck International High on September 14, 2024 and sell it today you would earn a total of  316.59  from holding VanEck International High or generate 17.95% return on investment over 90 days.

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

Blackrock Muniholdings Closed  vs.  VanEck International High

Blackrock Muniholdings

Risk-Adjusted Performance

0 of 100

Very Weak

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

VanEck International High

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days VanEck International High has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical indicators, VanEck International is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Blackrock Muniholdings and VanEck International

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

The idea behind Blackrock Muniholdings Closed and VanEck International 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.