Correlation Between Blackrock Muniyield and Carlyle

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

By analyzing existing cross correlation between Blackrock Muniyield and Carlyle Group, you can compare the effects of market volatilities on Blackrock Muniyield and Carlyle 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 Carlyle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackrock Muniyield and Carlyle.

Diversification Opportunities for Blackrock Muniyield and Carlyle

0.36

Correlation Coefficient

Blackrock Muniyield  Carlyle

Weak diversification

The 3 months correlation between Blackrock and Carlyle is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Blackrock Muniyield and Carlyle Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carlyle Group 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 Carlyle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carlyle Group has no effect on the direction of Blackrock Muniyield i.e., Blackrock Muniyield and Carlyle go up and down completely randomly.

Pair Corralation between Blackrock Muniyield and Carlyle

Considering the 90-day investment horizon Blackrock Muniyield is expected to under-perform the Carlyle. But the fund apears to be less risky and, when comparing its historical volatility, Blackrock Muniyield is 3.71 times less risky than Carlyle. The fund trades about -0.06 of its potential returns per unit of risk. The Carlyle Group is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  4,355  in Carlyle Group on February 18, 2024 and sell it today you would lose (50.00) from holding Carlyle Group or give up 1.15% of portfolio value over 90 days.

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

Blackrock Muniyield  vs.  Carlyle Group

Blackrock Muniyield

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Blackrock Muniyield has generated negative risk-adjusted returns adding no value to fund investors. 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.

Carlyle Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Carlyle Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Carlyle is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Blackrock Muniyield and Carlyle

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

The idea behind Blackrock Muniyield and Carlyle Group 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..