Correlation Between Central Europe and Blackrock Muniyield

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

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

Diversification Opportunities for Central Europe and Blackrock Muniyield

-0.17

Correlation Coefficient

Central Europe  Blackrock Muniyield

Good diversification

The 3 months correlation between Central and Blackrock is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Central Europe Russia and Blackrock Muniyield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Muniyield and Central Europe 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 Central Europe Russia are associated (or correlated) with Blackrock Muniyield. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock Muniyield has no effect on the direction of Central Europe i.e., Central Europe and Blackrock Muniyield go up and down completely randomly.

Pair Corralation between Central Europe and Blackrock Muniyield

Considering the 90-day investment horizon Central Europe Russia is expected to generate 3.0 times more return on investment than Blackrock Muniyield. However, Central Europe is 3.0 times more volatile than Blackrock Muniyield. It trades about 0.1 of its potential returns per unit of risk. Blackrock Muniyield is currently generating about 0.05 per unit of risk. If you would invest  1,065  in Central Europe Russia on August 20, 2024 and sell it today you would earn a total of  120.00  from holding Central Europe Russia or generate 11.27% return on investment over 90 days.

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

Central Europe Russia  vs.  Blackrock Muniyield

Central Europe Russia

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Central Europe Russia are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of rather weak technical and fundamental indicators, Central Europe may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Blackrock Muniyield

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Blackrock Muniyield are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of rather sound basic indicators, Blackrock Muniyield is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Central Europe and Blackrock Muniyield

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

The idea behind Central Europe Russia and Blackrock Muniyield 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 Global Correlations module to find global opportunities by holding instruments from different markets.