Correlation Between Blackrock Muni and Abrdn Emerging

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

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

Diversification Opportunities for Blackrock Muni and Abrdn Emerging

-0.15

Correlation Coefficient

Blackrock Muni  Abrdn Emerging

Good diversification

The 3 months correlation between Blackrock and Abrdn is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Blackrock Muni Intermediate and Abrdn Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Abrdn Emerging Markets and Blackrock Muni 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 Muni Intermediate are associated (or correlated) with Abrdn Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Abrdn Emerging Markets has no effect on the direction of Blackrock Muni i.e., Blackrock Muni and Abrdn Emerging go up and down completely randomly.

Pair Corralation between Blackrock Muni and Abrdn Emerging

Considering the 90-day investment horizon Blackrock Muni Intermediate is expected to generate 0.59 times more return on investment than Abrdn Emerging. However, Blackrock Muni Intermediate is 1.69 times less risky than Abrdn Emerging. It trades about 0.02 of its potential returns per unit of risk. Abrdn Emerging Markets is currently generating about -0.01 per unit of risk. If you would invest  1,205  in Blackrock Muni Intermediate on December 28, 2024 and sell it today you would earn a total of  4.00  from holding Blackrock Muni Intermediate or generate 0.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	60.66%
Values	Daily Returns

Blackrock Muni Intermediate  vs.  Abrdn Emerging Markets

Blackrock Muni Inter

Risk-Adjusted Performance

Weak

Over the last 90 days Blackrock Muni Intermediate has generated negative risk-adjusted returns adding no value to fund investors. Despite fairly strong basic indicators, Blackrock Muni is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Abrdn Emerging Markets

Risk-Adjusted Performance

Very Weak

Over the last 90 days Abrdn Emerging Markets has generated negative risk-adjusted returns adding no value to fund investors. Despite nearly stable technical and fundamental indicators, Abrdn Emerging is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Blackrock Muni and Abrdn Emerging

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

The idea behind Blackrock Muni Intermediate and Abrdn Emerging Markets 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.