Correlation Between Blackrock Muni and Invesco Trust

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

Diversification Opportunities for Blackrock Muni and Invesco Trust

-0.4

Correlation Coefficient

Blackrock Muni  Invesco Trust

Very good diversification

The 3 months correlation between Blackrock and Invesco is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Blackrock Muni Intermediate and Invesco Trust For in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Trust For 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 Invesco Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Trust For has no effect on the direction of Blackrock Muni i.e., Blackrock Muni and Invesco Trust go up and down completely randomly.

Pair Corralation between Blackrock Muni and Invesco Trust

If you would invest  1,209  in Blackrock Muni Intermediate on December 29, 2024 and sell it today you would earn a total of  0.00  from holding Blackrock Muni Intermediate or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	4.55%
Values	Daily Returns

Blackrock Muni Intermediate  vs.  Invesco Trust For

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.

Invesco Trust For

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Invesco Trust For are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy technical and fundamental indicators, Invesco Trust is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Blackrock Muni and Invesco Trust

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

The idea behind Blackrock Muni Intermediate and Invesco Trust For 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.