Correlation Between Blackrock Muniholdings and China Yuchai

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

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

Diversification Opportunities for Blackrock Muniholdings and China Yuchai

-0.39

Correlation Coefficient

Blackrock Muniholdings  China Yuchai

Very good diversification

The 3 months correlation between Blackrock and China is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Blackrock Muniholdings Quality and China Yuchai International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Yuchai Interna and Blackrock Muniholdings 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 Blackrock Muniholdings Quality are associated (or correlated) with China Yuchai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Yuchai Interna has no effect on the direction of Blackrock Muniholdings i.e., Blackrock Muniholdings and China Yuchai go up and down completely randomly.

Pair Corralation between Blackrock Muniholdings and China Yuchai

Considering the 90-day investment horizon Blackrock Muniholdings Quality is expected to under-perform the China Yuchai. But the fund apears to be less risky and, when comparing its historical volatility, Blackrock Muniholdings Quality is 6.94 times less risky than China Yuchai. The fund trades about -0.04 of its potential returns per unit of risk. The China Yuchai International is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  1,627  in China Yuchai International on May 6, 2025 and sell it today you would earn a total of  632.00  from holding China Yuchai International or generate 38.84% return on investment over 90 days.

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

Blackrock Muniholdings Quality  vs.  China Yuchai International

Blackrock Muniholdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Blackrock Muniholdings Quality has generated negative risk-adjusted returns adding no value to fund investors. In spite of rather sound basic indicators, Blackrock Muniholdings is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

China Yuchai Interna

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in China Yuchai International are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, China Yuchai exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Blackrock Muniholdings and China Yuchai

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

The idea behind Blackrock Muniholdings Quality and China Yuchai International 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.

Check out your portfolio center.

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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.