Correlation Between Blackrock Muniholdings and Guardian Capital

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

By analyzing existing cross correlation between Blackrock Muniholdings Ny and Guardian Capital Group, you can compare the effects of market volatilities on Blackrock Muniholdings and Guardian Capital 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 Guardian Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackrock Muniholdings and Guardian Capital.

Diversification Opportunities for Blackrock Muniholdings and Guardian Capital

0.47

Correlation Coefficient

Blackrock Muniholdings  Guardian Capital

Very weak diversification

The 3 months correlation between Blackrock and Guardian is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Blackrock Muniholdings Ny and Guardian Capital Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guardian Capital 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 Ny are associated (or correlated) with Guardian Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guardian Capital has no effect on the direction of Blackrock Muniholdings i.e., Blackrock Muniholdings and Guardian Capital go up and down completely randomly.

Pair Corralation between Blackrock Muniholdings and Guardian Capital

Considering the 90-day investment horizon Blackrock Muniholdings Ny is expected to generate 0.49 times more return on investment than Guardian Capital. However, Blackrock Muniholdings Ny is 2.04 times less risky than Guardian Capital. It trades about -0.02 of its potential returns per unit of risk. Guardian Capital Group is currently generating about -0.06 per unit of risk. If you would invest  1,021  in Blackrock Muniholdings Ny on December 30, 2024 and sell it today you would lose (7.00) from holding Blackrock Muniholdings Ny or give up 0.69% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	90.32%
Values	Daily Returns

Blackrock Muniholdings Ny  vs.  Guardian Capital Group

Blackrock Muniholdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Blackrock Muniholdings Ny has generated negative risk-adjusted returns adding no value to fund investors. In spite of very healthy technical indicators, Blackrock Muniholdings is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Guardian Capital

Risk-Adjusted Performance

Very Weak

Over the last 90 days Guardian Capital Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Guardian Capital is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Blackrock Muniholdings and Guardian Capital

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

The idea behind Blackrock Muniholdings Ny and Guardian Capital Group 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.