Correlation Between Blackrock Muniyield and Cohen Steers

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

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

Diversification Opportunities for Blackrock Muniyield and Cohen Steers

0.03

Correlation Coefficient

Blackrock Muniyield  Cohen Steers

Significant diversification

The 3 months correlation between Blackrock and Cohen is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Blackrock Muniyield and Cohen Steers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cohen Steers 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 Cohen Steers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cohen Steers has no effect on the direction of Blackrock Muniyield i.e., Blackrock Muniyield and Cohen Steers go up and down completely randomly.

Pair Corralation between Blackrock Muniyield and Cohen Steers

Considering the 90-day investment horizon Blackrock Muniyield is expected to generate 5.47 times less return on investment than Cohen Steers. But when comparing it to its historical volatility, Blackrock Muniyield is 2.36 times less risky than Cohen Steers. It trades about 0.08 of its potential returns per unit of risk. Cohen Steers is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  8,705  in Cohen Steers on September 2, 2024 and sell it today you would earn a total of  1,761  from holding Cohen Steers or generate 20.23% return on investment over 90 days.

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

Blackrock Muniyield  vs.  Cohen Steers

Blackrock Muniyield

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Blackrock Muniyield are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of rather sound basic indicators, Blackrock Muniyield is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Cohen Steers

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Cohen Steers are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, Cohen Steers unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Blackrock Muniyield and Cohen Steers

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

The idea behind Blackrock Muniyield and Cohen Steers 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.