Correlation Between RiverNorth Flexible and Blackrock Enhanced

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

By analyzing existing cross correlation between RiverNorth Flexible Municipalome and Blackrock Enhanced Government, you can compare the effects of market volatilities on RiverNorth Flexible and Blackrock Enhanced 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 RiverNorth Flexible with a short position of Blackrock Enhanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of RiverNorth Flexible and Blackrock Enhanced.

Diversification Opportunities for RiverNorth Flexible and Blackrock Enhanced

-0.37

Correlation Coefficient

RiverNorth Flexible  Blackrock Enhanced

Very good diversification

The 3 months correlation between RiverNorth and Blackrock is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding RiverNorth Flexible Municipalo and Blackrock Enhanced Government in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Enhanced and RiverNorth Flexible 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 RiverNorth Flexible Municipalome are associated (or correlated) with Blackrock Enhanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock Enhanced has no effect on the direction of RiverNorth Flexible i.e., RiverNorth Flexible and Blackrock Enhanced go up and down completely randomly.

Pair Corralation between RiverNorth Flexible and Blackrock Enhanced

Given the investment horizon of 90 days RiverNorth Flexible Municipalome is expected to generate 0.49 times more return on investment than Blackrock Enhanced. However, RiverNorth Flexible Municipalome is 2.04 times less risky than Blackrock Enhanced. It trades about 0.04 of its potential returns per unit of risk. Blackrock Enhanced Government is currently generating about 0.01 per unit of risk. If you would invest  1,324  in RiverNorth Flexible Municipalome on December 30, 2024 and sell it today you would earn a total of  21.00  from holding RiverNorth Flexible Municipalome or generate 1.59% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	93.55%
Values	Daily Returns

RiverNorth Flexible Municipalo  vs.  Blackrock Enhanced Government

RiverNorth Flexible

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in RiverNorth Flexible Municipalome are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong primary indicators, RiverNorth Flexible is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Blackrock Enhanced

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Blackrock Enhanced Government are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. Despite nearly stable technical and fundamental indicators, Blackrock Enhanced is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with RiverNorth Flexible and Blackrock Enhanced

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

The idea behind RiverNorth Flexible Municipalome and Blackrock Enhanced Government 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.