Correlation Between Nuveen New and Blackrock Muni

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

By analyzing existing cross correlation between Nuveen New York and Blackrock Muni Intermediate, you can compare the effects of market volatilities on Nuveen New and Blackrock Muni 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 Nuveen New with a short position of Blackrock Muni. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuveen New and Blackrock Muni.

Diversification Opportunities for Nuveen New and Blackrock Muni

0.14

Correlation Coefficient

Nuveen New  Blackrock Muni

Average diversification

The 3 months correlation between Nuveen and Blackrock is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen New York and Blackrock Muni Intermediate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Muni Inter and Nuveen New 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 Nuveen New York are associated (or correlated) with Blackrock Muni. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock Muni Inter has no effect on the direction of Nuveen New i.e., Nuveen New and Blackrock Muni go up and down completely randomly.

Pair Corralation between Nuveen New and Blackrock Muni

Considering the 90-day investment horizon Nuveen New is expected to generate 1.24 times less return on investment than Blackrock Muni. But when comparing it to its historical volatility, Nuveen New York is 1.03 times less risky than Blackrock Muni. It trades about 0.06 of its potential returns per unit of risk. Blackrock Muni Intermediate is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  1,040  in Blackrock Muni Intermediate on August 31, 2024 and sell it today you would earn a total of  225.00  from holding Blackrock Muni Intermediate or generate 21.63% return on investment over 90 days.

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

Nuveen New York  vs.  Blackrock Muni Intermediate

Nuveen New York

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Nuveen New York are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. Despite quite persistent basic indicators, Nuveen New is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

Blackrock Muni Inter

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Blackrock Muni Intermediate are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. Despite fairly strong basic indicators, Blackrock Muni is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Nuveen New and Blackrock Muni

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

The idea behind Nuveen New York and Blackrock Muni Intermediate 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.