Correlation Between Blackrock Muniholdings and Blackrock Munivest

Can any of the company-specific risk be diversified away by investing in both Blackrock Muniholdings and Blackrock Munivest 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 Blackrock Munivest 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 Blackrock Munivest, you can compare the effects of market volatilities on Blackrock Muniholdings and Blackrock Munivest 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 Blackrock Munivest. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackrock Muniholdings and Blackrock Munivest.

Diversification Opportunities for Blackrock Muniholdings and Blackrock Munivest

0.83

Correlation Coefficient

Blackrock Muniholdings  Blackrock Munivest

Very poor diversification

The 3 months correlation between Blackrock and Blackrock is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Blackrock Muniholdings Quality and Blackrock Munivest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Munivest 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 Blackrock Munivest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock Munivest has no effect on the direction of Blackrock Muniholdings i.e., Blackrock Muniholdings and Blackrock Munivest go up and down completely randomly.

Pair Corralation between Blackrock Muniholdings and Blackrock Munivest

Considering the 90-day investment horizon Blackrock Muniholdings Quality is expected to under-perform the Blackrock Munivest. But the fund apears to be less risky and, when comparing its historical volatility, Blackrock Muniholdings Quality is 1.18 times less risky than Blackrock Munivest. The fund trades about -0.04 of its potential returns per unit of risk. The Blackrock Munivest is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  1,023  in Blackrock Munivest on May 7, 2025 and sell it today you would lose (9.00) from holding Blackrock Munivest or give up 0.88% of portfolio value over 90 days.

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

Blackrock Muniholdings Quality  vs.  Blackrock Munivest

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.

Blackrock Munivest

Risk-Adjusted Performance

Very Weak

Over the last 90 days Blackrock Munivest has generated negative risk-adjusted returns adding no value to fund investors. In spite of comparatively stable basic indicators, Blackrock Munivest is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Blackrock Muniholdings and Blackrock Munivest

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

The idea behind Blackrock Muniholdings Quality and Blackrock Munivest 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.