Correlation Between Blackrock Muniyield and India Closed

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

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

Diversification Opportunities for Blackrock Muniyield and India Closed

-0.55

Correlation Coefficient

Blackrock Muniyield  India Closed

Excellent diversification

The 3 months correlation between Blackrock and India is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Blackrock Muniyield Mi and India Closed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on India Closed and Blackrock Muniyield 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 Muniyield Mi are associated (or correlated) with India Closed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of India Closed has no effect on the direction of Blackrock Muniyield i.e., Blackrock Muniyield and India Closed go up and down completely randomly.

Pair Corralation between Blackrock Muniyield and India Closed

Considering the 90-day investment horizon Blackrock Muniyield is expected to generate 1.68 times less return on investment than India Closed. But when comparing it to its historical volatility, Blackrock Muniyield Mi is 2.12 times less risky than India Closed. It trades about 0.07 of its potential returns per unit of risk. India Closed is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  1,525  in India Closed on December 28, 2024 and sell it today you would earn a total of  55.00  from holding India Closed or generate 3.61% return on investment over 90 days.

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

Blackrock Muniyield Mi  vs.  India Closed

Blackrock Muniyield

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Blackrock Muniyield Mi are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Blackrock Muniyield is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

India Closed

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in India Closed are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of very healthy technical and fundamental indicators, India Closed is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Blackrock Muniyield and India Closed

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

The idea behind Blackrock Muniyield Mi and India Closed 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.