Correlation Between Blackrock Muniyield and DUET Acquisition

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

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

Diversification Opportunities for Blackrock Muniyield and DUET Acquisition

0.72

Correlation Coefficient

Blackrock Muniyield  DUET Acquisition

Poor diversification

The 3 months correlation between Blackrock and DUET is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Blackrock Muniyield and DUET Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DUET Acquisition Corp and Blackrock Muniyield 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 Muniyield are associated (or correlated) with DUET Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DUET Acquisition Corp has no effect on the direction of Blackrock Muniyield i.e., Blackrock Muniyield and DUET Acquisition go up and down completely randomly.

Pair Corralation between Blackrock Muniyield and DUET Acquisition

If you would invest  1,126  in DUET Acquisition Corp on July 16, 2024 and sell it today you would earn a total of  0.00  from holding DUET Acquisition Corp or generate 0.0% return on investment over 90 days.

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

Blackrock Muniyield  vs.  DUET Acquisition Corp

Blackrock Muniyield

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Blackrock Muniyield are ranked lower than 11 (%) 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 recent stock price tumult, may contribute to shorter-term losses for the shareholders.

DUET Acquisition Corp

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in DUET Acquisition Corp are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable technical and fundamental indicators, DUET Acquisition is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Blackrock Muniyield and DUET Acquisition

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

The idea behind Blackrock Muniyield and DUET Acquisition Corp 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.