Correlation Between Blackrock Muniyield and Mexico Closed

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

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

Diversification Opportunities for Blackrock Muniyield and Mexico Closed

-0.41

Correlation Coefficient

Blackrock Muniyield  Mexico Closed

Very good diversification

The 3 months correlation between Blackrock and Mexico is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Blackrock Muniyield Pennsylvan and Mexico Closed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mexico 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 Pennsylvania are associated (or correlated) with Mexico Closed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mexico Closed has no effect on the direction of Blackrock Muniyield i.e., Blackrock Muniyield and Mexico Closed go up and down completely randomly.

Pair Corralation between Blackrock Muniyield and Mexico Closed

Considering the 90-day investment horizon Blackrock Muniyield Pennsylvania is expected to under-perform the Mexico Closed. But the fund apears to be less risky and, when comparing its historical volatility, Blackrock Muniyield Pennsylvania is 1.95 times less risky than Mexico Closed. The fund trades about -0.06 of its potential returns per unit of risk. The Mexico Closed is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  1,295  in Mexico Closed on December 28, 2024 and sell it today you would earn a total of  152.00  from holding Mexico Closed or generate 11.74% 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 Pennsylvan  vs.  Mexico Closed

Blackrock Muniyield

Risk-Adjusted Performance

Very Weak

Over the last 90 days Blackrock Muniyield Pennsylvania has generated negative risk-adjusted returns adding no value to fund investors. Despite somewhat strong basic indicators, Blackrock Muniyield is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Mexico Closed

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Mexico Closed are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. Despite nearly weak basic indicators, Mexico Closed may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Blackrock Muniyield and Mexico Closed

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

The idea behind Blackrock Muniyield Pennsylvania and Mexico 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.