Correlation Between Mairs Power and BlackRock Intermediate

Can any of the company-specific risk be diversified away by investing in both Mairs Power and BlackRock Intermediate 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 Mairs Power and BlackRock Intermediate into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Mairs Power Minnesota and BlackRock Intermediate Muni, you can compare the effects of market volatilities on Mairs Power and BlackRock Intermediate 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 Mairs Power with a short position of BlackRock Intermediate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mairs Power and BlackRock Intermediate.

Diversification Opportunities for Mairs Power and BlackRock Intermediate

0.89

Correlation Coefficient

Mairs Power  BlackRock Intermediate

Very poor diversification

The 3 months correlation between Mairs and BlackRock is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Mairs Power Minnesota and BlackRock Intermediate Muni in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BlackRock Intermediate and Mairs Power 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 Mairs Power Minnesota are associated (or correlated) with BlackRock Intermediate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BlackRock Intermediate has no effect on the direction of Mairs Power i.e., Mairs Power and BlackRock Intermediate go up and down completely randomly.

Pair Corralation between Mairs Power and BlackRock Intermediate

Given the investment horizon of 90 days Mairs Power is expected to generate 17.2 times less return on investment than BlackRock Intermediate. In addition to that, Mairs Power is 1.57 times more volatile than BlackRock Intermediate Muni. It trades about 0.0 of its total potential returns per unit of risk. BlackRock Intermediate Muni is currently generating about 0.04 per unit of volatility. If you would invest  2,351  in BlackRock Intermediate Muni on December 29, 2024 and sell it today you would earn a total of  12.00  from holding BlackRock Intermediate Muni or generate 0.51% return on investment over 90 days.

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

Mairs Power Minnesota  vs.  BlackRock Intermediate Muni

Mairs Power Minnesota

Risk-Adjusted Performance

Very Weak

Over the last 90 days Mairs Power Minnesota has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Mairs Power is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

BlackRock Intermediate

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in BlackRock Intermediate Muni are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable primary indicators, BlackRock Intermediate is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Mairs Power and BlackRock Intermediate

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

The idea behind Mairs Power Minnesota and BlackRock Intermediate Muni 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.