Correlation Between Blackrock Muniholdings and Virtus AllianzGI

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

Diversification Opportunities for Blackrock Muniholdings and Virtus AllianzGI

0.62

Correlation Coefficient

Blackrock Muniholdings  Virtus AllianzGI

Poor diversification

The 3 months correlation between Blackrock and Virtus is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Blackrock Muniholdings Ny and Virtus AllianzGI Convertible in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virtus AllianzGI Con 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 Virtus AllianzGI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virtus AllianzGI Con has no effect on the direction of Blackrock Muniholdings i.e., Blackrock Muniholdings and Virtus AllianzGI go up and down completely randomly.

Pair Corralation between Blackrock Muniholdings and Virtus AllianzGI

Considering the 90-day investment horizon Blackrock Muniholdings Ny is expected to under-perform the Virtus AllianzGI. In addition to that, Blackrock Muniholdings is 1.58 times more volatile than Virtus AllianzGI Convertible. It trades about -0.27 of its total potential returns per unit of risk. Virtus AllianzGI Convertible is currently generating about -0.3 per unit of volatility. If you would invest  2,177  in Virtus AllianzGI Convertible on September 26, 2024 and sell it today you would lose (56.00) from holding Virtus AllianzGI Convertible or give up 2.57% of portfolio value over 90 days.

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

Blackrock Muniholdings Ny  vs.  Virtus AllianzGI Convertible

Blackrock Muniholdings

Risk-Adjusted Performance

0 of 100

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.

Virtus AllianzGI Con

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Virtus AllianzGI Convertible has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Preferred Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Blackrock Muniholdings and Virtus AllianzGI

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

The idea behind Blackrock Muniholdings Ny and Virtus AllianzGI Convertible 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 Transaction History module to view history of all your transactions and understand their impact on performance.