Correlation Between Vanguard and Blackrock Muniholdings

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

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

Diversification Opportunities for Vanguard and Blackrock Muniholdings

0.46

Correlation Coefficient

Vanguard  Blackrock Muniholdings

Very weak diversification

The 3 months correlation between Vanguard and Blackrock is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Multifactor and Blackrock Muniholdings Closed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Muniholdings and Vanguard 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 Vanguard Multifactor 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 Vanguard i.e., Vanguard and Blackrock Muniholdings go up and down completely randomly.

Pair Corralation between Vanguard and Blackrock Muniholdings

Assuming the 90 days horizon Vanguard Multifactor is expected to under-perform the Blackrock Muniholdings. In addition to that, Vanguard is 1.65 times more volatile than Blackrock Muniholdings Closed. It trades about -0.07 of its total potential returns per unit of risk. Blackrock Muniholdings Closed is currently generating about 0.06 per unit of volatility. If you would invest  1,148  in Blackrock Muniholdings Closed on December 30, 2024 and sell it today you would earn a total of  23.00  from holding Blackrock Muniholdings Closed or generate 2.0% return on investment over 90 days.

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

Vanguard Multifactor  vs.  Blackrock Muniholdings Closed

Vanguard Multifactor

Risk-Adjusted Performance

Very Weak

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

Blackrock Muniholdings

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Blackrock Muniholdings Closed are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of rather sound technical indicators, Blackrock Muniholdings is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Vanguard and Blackrock Muniholdings

The main advantage of trading using opposite Vanguard and Blackrock Muniholdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard 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 Vanguard Multifactor and Blackrock Muniholdings Closed 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..