Correlation Between Patria Investments and Blackrock Muniyield

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

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

Diversification Opportunities for Patria Investments and Blackrock Muniyield

-0.21

Correlation Coefficient

Patria Investments  Blackrock Muniyield

Very good diversification

The 3 months correlation between Patria and Blackrock is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Patria Investments and Blackrock Muniyield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Muniyield and Patria Investments 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 Patria Investments are associated (or correlated) with Blackrock Muniyield. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock Muniyield has no effect on the direction of Patria Investments i.e., Patria Investments and Blackrock Muniyield go up and down completely randomly.

Pair Corralation between Patria Investments and Blackrock Muniyield

Considering the 90-day investment horizon Patria Investments is expected to generate 6.47 times less return on investment than Blackrock Muniyield. In addition to that, Patria Investments is 2.52 times more volatile than Blackrock Muniyield. It trades about 0.0 of its total potential returns per unit of risk. Blackrock Muniyield is currently generating about 0.03 per unit of volatility. If you would invest  949.00  in Blackrock Muniyield on September 23, 2024 and sell it today you would earn a total of  91.00  from holding Blackrock Muniyield or generate 9.59% return on investment over 90 days.

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

Patria Investments  vs.  Blackrock Muniyield

Patria Investments

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Patria Investments are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Patria Investments is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

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 latest inconsistent performance, the Fund's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the fund shareholders.

Pair Trading with Patria Investments and Blackrock Muniyield

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

The idea behind Patria Investments and Blackrock Muniyield 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..