Correlation Between Virtus AllianzGI and Blackrock Muniholdings

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

By analyzing existing cross correlation between Virtus AllianzGI Convertible and Blackrock Muniholdings Ny, you can compare the effects of market volatilities on Virtus AllianzGI and Blackrock Muniholdings 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 Virtus AllianzGI with a short position of Blackrock Muniholdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virtus AllianzGI and Blackrock Muniholdings.

Diversification Opportunities for Virtus AllianzGI and Blackrock Muniholdings

0.62

Correlation Coefficient

Virtus AllianzGI  Blackrock Muniholdings

Poor diversification

The 3 months correlation between Virtus and Blackrock is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Virtus AllianzGI Convertible and Blackrock Muniholdings Ny in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Muniholdings and Virtus AllianzGI 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 Virtus AllianzGI Convertible are associated (or correlated) with Blackrock Muniholdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock Muniholdings has no effect on the direction of Virtus AllianzGI i.e., Virtus AllianzGI and Blackrock Muniholdings go up and down completely randomly.

Pair Corralation between Virtus AllianzGI and Blackrock Muniholdings

Assuming the 90 days trading horizon Virtus AllianzGI Convertible is expected to generate 0.63 times more return on investment than Blackrock Muniholdings. However, Virtus AllianzGI Convertible is 1.58 times less risky than Blackrock Muniholdings. It trades about -0.3 of its potential returns per unit of risk. Blackrock Muniholdings Ny is currently generating about -0.27 per unit of risk. If you would invest  2,177  in Virtus AllianzGI Convertible on September 26, 2024 and sell it today you would lose (56.00) from holding Virtus AllianzGI Convertible or give up 2.57% of portfolio value over 90 days.

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

Virtus AllianzGI Convertible  vs.  Blackrock Muniholdings Ny

Virtus AllianzGI Con

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Virtus AllianzGI Convertible has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Preferred Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Blackrock Muniholdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Blackrock Muniholdings Ny has generated negative risk-adjusted returns adding no value to fund investors. In spite of very healthy technical indicators, Blackrock Muniholdings is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Virtus AllianzGI and Blackrock Muniholdings

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

The idea behind Virtus AllianzGI Convertible and Blackrock Muniholdings Ny 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..