Correlation Between Blackrock Muniyield and Alerus Financial

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

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

Diversification Opportunities for Blackrock Muniyield and Alerus Financial

0.82

Correlation Coefficient

Blackrock Muniyield  Alerus Financial

Very poor diversification

The 3 months correlation between Blackrock and Alerus is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Blackrock Muniyield and Alerus Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alerus Financial Corp and Blackrock Muniyield 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 Muniyield are associated (or correlated) with Alerus Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alerus Financial Corp has no effect on the direction of Blackrock Muniyield i.e., Blackrock Muniyield and Alerus Financial go up and down completely randomly.

Pair Corralation between Blackrock Muniyield and Alerus Financial

Considering the 90-day investment horizon Blackrock Muniyield is expected to generate 0.29 times more return on investment than Alerus Financial. However, Blackrock Muniyield is 3.47 times less risky than Alerus Financial. It trades about 0.07 of its potential returns per unit of risk. Alerus Financial Corp is currently generating about 0.02 per unit of risk. If you would invest  936.00  in Blackrock Muniyield on October 11, 2024 and sell it today you would earn a total of  121.00  from holding Blackrock Muniyield or generate 12.93% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	99.65%
Values	Daily Returns

Blackrock Muniyield  vs.  Alerus Financial Corp

Blackrock Muniyield

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Blackrock Muniyield has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest inconsistent performance, the Fund's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the fund shareholders.

Alerus Financial Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Alerus Financial Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Blackrock Muniyield and Alerus Financial

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

The idea behind Blackrock Muniyield and Alerus Financial 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.