Correlation Between Blackrock Munivest and Katahdin Bankshares

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

By analyzing existing cross correlation between Blackrock Munivest and Katahdin Bankshares Corp, you can compare the effects of market volatilities on Blackrock Munivest and Katahdin Bankshares 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 Katahdin Bankshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackrock Munivest and Katahdin Bankshares.

Diversification Opportunities for Blackrock Munivest and Katahdin Bankshares

-0.64

Correlation Coefficient

Blackrock Munivest  Katahdin Bankshares

Excellent diversification

The 3 months correlation between Blackrock and Katahdin is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Blackrock Munivest and Katahdin Bankshares Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Katahdin Bankshares Corp 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 Katahdin Bankshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Katahdin Bankshares Corp has no effect on the direction of Blackrock Munivest i.e., Blackrock Munivest and Katahdin Bankshares go up and down completely randomly.

Pair Corralation between Blackrock Munivest and Katahdin Bankshares

Considering the 90-day investment horizon Blackrock Munivest is expected to generate 0.5 times more return on investment than Katahdin Bankshares. However, Blackrock Munivest is 1.99 times less risky than Katahdin Bankshares. It trades about 0.12 of its potential returns per unit of risk. Katahdin Bankshares Corp is currently generating about -0.06 per unit of risk. If you would invest  1,033  in Blackrock Munivest on December 22, 2024 and sell it today you would earn a total of  49.00  from holding Blackrock Munivest or generate 4.74% return on investment over 90 days.

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

Blackrock Munivest  vs.  Katahdin Bankshares Corp

Blackrock Munivest

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Blackrock Munivest are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. 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.

Katahdin Bankshares Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Katahdin Bankshares Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical indicators, Katahdin Bankshares 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 Munivest and Katahdin Bankshares

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

The idea behind Blackrock Munivest and Katahdin Bankshares Corp 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.