Correlation Between Platinum Asia and Blackrock Munivest

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

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

Diversification Opportunities for Platinum Asia and Blackrock Munivest

0.51

Correlation Coefficient

Platinum Asia  Blackrock Munivest

Very weak diversification

The 3 months correlation between Platinum and Blackrock is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Platinum Asia Investments and Blackrock Munivest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Munivest and Platinum Asia 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 Platinum Asia Investments 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 Platinum Asia i.e., Platinum Asia and Blackrock Munivest go up and down completely randomly.

Pair Corralation between Platinum Asia and Blackrock Munivest

Considering the 90-day investment horizon Platinum Asia Investments is expected to generate 1.62 times more return on investment than Blackrock Munivest. However, Platinum Asia is 1.62 times more volatile than Blackrock Munivest. It trades about -0.02 of its potential returns per unit of risk. Blackrock Munivest is currently generating about -0.45 per unit of risk. If you would invest  1,256  in Platinum Asia Investments on October 4, 2024 and sell it today you would lose (5.00) from holding Platinum Asia Investments or give up 0.4% of portfolio value over 90 days.

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

Platinum Asia Investments  vs.  Blackrock Munivest

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.

Blackrock Munivest

Risk-Adjusted Performance

0 of 100

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 newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Platinum Asia and Blackrock Munivest

The main advantage of trading using opposite Platinum Asia and Blackrock Munivest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Platinum Asia 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 Platinum Asia Investments 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.