Correlation Between T Rowe and Blackrock Municipal
Can any of the company-specific risk be diversified away by investing in both T Rowe and Blackrock Municipal 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 T Rowe and Blackrock Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between T Rowe Price and Blackrock Municipal Target, you can compare the effects of market volatilities on T Rowe and Blackrock Municipal 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 T Rowe with a short position of Blackrock Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of T Rowe and Blackrock Municipal.
Diversification Opportunities for T Rowe and Blackrock Municipal
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between TRSJX and Blackrock is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding T Rowe Price and Blackrock Municipal Target in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Municipal and T Rowe 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 T Rowe Price are associated (or correlated) with Blackrock Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock Municipal has no effect on the direction of T Rowe i.e., T Rowe and Blackrock Municipal go up and down completely randomly.
Pair Corralation between T Rowe and Blackrock Municipal
Assuming the 90 days horizon T Rowe Price is expected to under-perform the Blackrock Municipal. In addition to that, T Rowe is 2.19 times more volatile than Blackrock Municipal Target. It trades about -0.08 of its total potential returns per unit of risk. Blackrock Municipal Target is currently generating about -0.09 per unit of volatility. If you would invest 2,256 in Blackrock Municipal Target on August 20, 2025 and sell it today you would lose (13.00) from holding Blackrock Municipal Target or give up 0.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
T Rowe Price vs. Blackrock Municipal Target
Performance |
| Timeline |
| T Rowe Price |
| Blackrock Municipal |
T Rowe and Blackrock Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with T Rowe and Blackrock Municipal
The main advantage of trading using opposite T Rowe and Blackrock Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if T Rowe position performs unexpectedly, Blackrock Municipal 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 Municipal will offset losses from the drop in Blackrock Municipal's long position.| T Rowe vs. Schwab Target 2040 | T Rowe vs. Schwab Target 2030 | T Rowe vs. Schwab Target 2050 | T Rowe vs. Schwab Target 2035 |
| Blackrock Municipal vs. BlackRock Science Tech | Blackrock Municipal vs. Schwab Target 2040 | Blackrock Municipal vs. T Rowe Price | Blackrock Municipal vs. Blackrock Enhanced Equity |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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