Correlation Between Blackrock Muni and Avantax

Can any of the company-specific risk be diversified away by investing in both Blackrock Muni and Avantax 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 Avantax 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 Avantax, you can compare the effects of market volatilities on Blackrock Muni and Avantax 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 Avantax. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackrock Muni and Avantax.

Diversification Opportunities for Blackrock Muni and Avantax

0.0

Correlation Coefficient

Blackrock Muni  Avantax

Pay attention - limited upside

The 3 months correlation between Blackrock and Avantax is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Blackrock Muni Intermediate and Avantax in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avantax 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 Avantax. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avantax has no effect on the direction of Blackrock Muni i.e., Blackrock Muni and Avantax go up and down completely randomly.

Pair Corralation between Blackrock Muni and Avantax

If you would invest (100.00) in Avantax on December 4, 2024 and sell it today you would earn a total of  100.00  from holding Avantax or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Blackrock Muni Intermediate  vs.  Avantax

Blackrock Muni Inter

Risk-Adjusted Performance

Very 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.

Avantax

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Blackrock Muni and Avantax

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

The idea behind Blackrock Muni Intermediate and Avantax 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.

Check out your portfolio center.

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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.