Correlation Between Blackrock Muniholdings and PGIM Active

Can any of the company-specific risk be diversified away by investing in both Blackrock Muniholdings and PGIM Active 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 PGIM Active 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 PGIM Active High, you can compare the effects of market volatilities on Blackrock Muniholdings and PGIM Active 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 PGIM Active. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackrock Muniholdings and PGIM Active.

Diversification Opportunities for Blackrock Muniholdings and PGIM Active

0.17

Correlation Coefficient

Blackrock Muniholdings  PGIM Active

Average diversification

The 3 months correlation between Blackrock and PGIM is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Blackrock Muniholdings Closed and PGIM Active High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PGIM Active 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 PGIM Active. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PGIM Active High has no effect on the direction of Blackrock Muniholdings i.e., Blackrock Muniholdings and PGIM Active go up and down completely randomly.

Pair Corralation between Blackrock Muniholdings and PGIM Active

Considering the 90-day investment horizon Blackrock Muniholdings Closed is expected to under-perform the PGIM Active. In addition to that, Blackrock Muniholdings is 3.57 times more volatile than PGIM Active High. It trades about -0.04 of its total potential returns per unit of risk. PGIM Active High is currently generating about 0.09 per unit of volatility. If you would invest  3,487  in PGIM Active High on September 14, 2024 and sell it today you would earn a total of  37.00  from holding PGIM Active High or generate 1.06% return on investment over 90 days.

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

Blackrock Muniholdings Closed  vs.  PGIM Active 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.

PGIM Active High

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in PGIM Active High are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, PGIM Active is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Blackrock Muniholdings and PGIM Active

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

The idea behind Blackrock Muniholdings Closed and PGIM Active 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.

Check out your portfolio center.

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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..