Correlation Between Blackrock Muniholdings and Korea Closed

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

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

Diversification Opportunities for Blackrock Muniholdings and Korea Closed

0.54

Correlation Coefficient

Blackrock Muniholdings  Korea Closed

Very weak diversification

The 3 months correlation between Blackrock and Korea is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Blackrock Muniholdings Quality and Korea Closed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Closed 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 Quality are associated (or correlated) with Korea Closed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Closed has no effect on the direction of Blackrock Muniholdings i.e., Blackrock Muniholdings and Korea Closed go up and down completely randomly.

Pair Corralation between Blackrock Muniholdings and Korea Closed

Considering the 90-day investment horizon Blackrock Muniholdings is expected to generate 8.52 times less return on investment than Korea Closed. But when comparing it to its historical volatility, Blackrock Muniholdings Quality is 1.73 times less risky than Korea Closed. It trades about 0.03 of its potential returns per unit of risk. Korea Closed is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  1,853  in Korea Closed on December 28, 2024 and sell it today you would earn a total of  236.00  from holding Korea Closed or generate 12.74% return on investment over 90 days.

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

Blackrock Muniholdings Quality  vs.  Korea Closed

Blackrock Muniholdings

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Blackrock Muniholdings Quality are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of rather sound basic indicators, Blackrock Muniholdings is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Korea Closed

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Korea Closed are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. Despite nearly unsteady technical and fundamental indicators, Korea Closed reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Blackrock Muniholdings and Korea Closed

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

The idea behind Blackrock Muniholdings Quality and Korea 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.