Correlation Between Pace Municipal and Blackrock Fundamental

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

By analyzing existing cross correlation between Pace Municipal Fixed and Blackrock Fundamental Growth, you can compare the effects of market volatilities on Pace Municipal and Blackrock Fundamental 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 Pace Municipal with a short position of Blackrock Fundamental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pace Municipal and Blackrock Fundamental.

Diversification Opportunities for Pace Municipal and Blackrock Fundamental

0.62

Correlation Coefficient

Pace Municipal  Blackrock Fundamental

Poor diversification

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

Pair Corralation between Pace Municipal and Blackrock Fundamental

Assuming the 90 days horizon Pace Municipal Fixed is expected to under-perform the Blackrock Fundamental. But the mutual fund apears to be less risky and, when comparing its historical volatility, Pace Municipal Fixed is 6.02 times less risky than Blackrock Fundamental. The mutual fund trades about -0.1 of its potential returns per unit of risk. The Blackrock Fundamental Growth is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  4,411  in Blackrock Fundamental Growth on October 26, 2024 and sell it today you would earn a total of  132.00  from holding Blackrock Fundamental Growth or generate 2.99% return on investment over 90 days.

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

Pace Municipal Fixed  vs.  Blackrock Fundamental Growth

Pace Municipal Fixed

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pace Municipal Fixed has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Pace Municipal is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Blackrock Fundamental

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Blackrock Fundamental Growth are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Blackrock Fundamental may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Pace Municipal and Blackrock Fundamental

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

The idea behind Pace Municipal Fixed and Blackrock Fundamental Growth 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.