Correlation Between Blackrock Muniholdings and Platinum Asia

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

By analyzing existing cross correlation between Blackrock Muniholdings Closed and Platinum Asia Investments, you can compare the effects of market volatilities on Blackrock Muniholdings and Platinum Asia 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 Platinum Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackrock Muniholdings and Platinum Asia.

Diversification Opportunities for Blackrock Muniholdings and Platinum Asia

0.53

Correlation Coefficient

Blackrock Muniholdings  Platinum Asia

Very weak diversification

The 3 months correlation between Blackrock and Platinum is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Blackrock Muniholdings Closed and Platinum Asia Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Platinum Asia Investments 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 Closed are associated (or correlated) with Platinum Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Platinum Asia Investments has no effect on the direction of Blackrock Muniholdings i.e., Blackrock Muniholdings and Platinum Asia go up and down completely randomly.

Pair Corralation between Blackrock Muniholdings and Platinum Asia

Considering the 90-day investment horizon Blackrock Muniholdings Closed is expected to under-perform the Platinum Asia. But the fund apears to be less risky and, when comparing its historical volatility, Blackrock Muniholdings Closed is 1.11 times less risky than Platinum Asia. The fund trades about -0.15 of its potential returns per unit of risk. The Platinum Asia Investments is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  1,270  in Platinum Asia Investments on September 29, 2024 and sell it today you would lose (23.00) from holding Platinum Asia Investments or give up 1.81% of portfolio value over 90 days.

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

Blackrock Muniholdings Closed  vs.  Platinum Asia Investments

Blackrock Muniholdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Blackrock Muniholdings Closed has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest inconsistent performance, the Fund's technical indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the fund shareholders.

Platinum Asia Investments

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Platinum Asia Investments has generated negative risk-adjusted returns adding no value to fund investors. Despite fairly strong basic indicators, Platinum Asia is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Blackrock Muniholdings and Platinum Asia

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

The idea behind Blackrock Muniholdings Closed and Platinum Asia Investments 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 Commodity Directory module to find actively traded commodities issued by global exchanges.