Correlation Between Blackrock Muniyield and Stepstone

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

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

Diversification Opportunities for Blackrock Muniyield and Stepstone

-0.03

Correlation Coefficient

Blackrock Muniyield  Stepstone

Good diversification

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

Pair Corralation between Blackrock Muniyield and Stepstone

Considering the 90-day investment horizon Blackrock Muniyield is expected to generate 0.2 times more return on investment than Stepstone. However, Blackrock Muniyield is 5.06 times less risky than Stepstone. It trades about 0.11 of its potential returns per unit of risk. Stepstone Group is currently generating about -0.04 per unit of risk. If you would invest  1,021  in Blackrock Muniyield on December 22, 2024 and sell it today you would earn a total of  35.00  from holding Blackrock Muniyield or generate 3.43% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

Blackrock Muniyield  vs.  Stepstone Group

Blackrock Muniyield

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Blackrock Muniyield are ranked lower than 8 (%) 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.

Stepstone Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Stepstone Group has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest fragile performance, the Stock's technical and fundamental indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pair Trading with Blackrock Muniyield and Stepstone

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

The idea behind Blackrock Muniyield and Stepstone Group 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.