Correlation Between Blackrock Munivest and Western Asset

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

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

Diversification Opportunities for Blackrock Munivest and Western Asset

0.17

Correlation Coefficient

Blackrock Munivest  Western Asset

Average diversification

The 3 months correlation between Blackrock and Western is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Blackrock Munivest and Western Asset High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset High and Blackrock Munivest 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 Munivest are associated (or correlated) with Western Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Asset High has no effect on the direction of Blackrock Munivest i.e., Blackrock Munivest and Western Asset go up and down completely randomly.

Pair Corralation between Blackrock Munivest and Western Asset

Considering the 90-day investment horizon Blackrock Munivest is expected to under-perform the Western Asset. But the fund apears to be less risky and, when comparing its historical volatility, Blackrock Munivest is 1.13 times less risky than Western Asset. The fund trades about -0.16 of its potential returns per unit of risk. The Western Asset High is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest  434.00  in Western Asset High on September 20, 2024 and sell it today you would lose (11.00) from holding Western Asset High or give up 2.53% of portfolio value over 90 days.

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

Blackrock Munivest  vs.  Western Asset High

Blackrock Munivest

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Blackrock Munivest has generated negative risk-adjusted returns adding no value to fund investors. In spite of comparatively stable basic indicators, Blackrock Munivest is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Western Asset High

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Western Asset High has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Western Asset is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Blackrock Munivest and Western Asset

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

The idea behind Blackrock Munivest and Western Asset High 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.