Correlation Between Hamilton Lane and Blackrock Muniyield

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

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

Diversification Opportunities for Hamilton Lane and Blackrock Muniyield

0.7

Correlation Coefficient

Hamilton Lane  Blackrock Muniyield

Poor diversification

The 3 months correlation between Hamilton and Blackrock is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Hamilton Lane and Blackrock Muniyield Quality in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Muniyield and Hamilton Lane 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 Hamilton Lane 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 Hamilton Lane i.e., Hamilton Lane and Blackrock Muniyield go up and down completely randomly.

Pair Corralation between Hamilton Lane and Blackrock Muniyield

Given the investment horizon of 90 days Hamilton Lane is expected to generate 3.36 times more return on investment than Blackrock Muniyield. However, Hamilton Lane is 3.36 times more volatile than Blackrock Muniyield Quality. It trades about 0.21 of its potential returns per unit of risk. Blackrock Muniyield Quality is currently generating about 0.1 per unit of risk. If you would invest  13,680  in Hamilton Lane on July 14, 2024 and sell it today you would earn a total of  3,794  from holding Hamilton Lane or generate 27.73% return on investment over 90 days.

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

Hamilton Lane  vs.  Blackrock Muniyield Quality

Hamilton Lane

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Hamilton Lane are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, Hamilton Lane exhibited solid returns over the last few months and may actually be approaching a breakup point.

Blackrock Muniyield

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Blackrock Muniyield Quality are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of comparatively stable basic indicators, Blackrock Muniyield is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Hamilton Lane and Blackrock Muniyield

The main advantage of trading using opposite Hamilton Lane and Blackrock Muniyield positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hamilton Lane 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 Hamilton Lane and Blackrock Muniyield Quality 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .