Correlation Between Platinum Asia and Blackrock Muniholdings
Can any of the company-specific risk be diversified away by investing in both Platinum Asia and Blackrock Muniholdings 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 Muniholdings 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 Muniholdings Ca, you can compare the effects of market volatilities on Platinum Asia and Blackrock Muniholdings 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 Muniholdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Platinum Asia and Blackrock Muniholdings.
Diversification Opportunities for Platinum Asia and Blackrock Muniholdings
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Platinum and Blackrock is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Platinum Asia Investments and Blackrock Muniholdings Ca in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Muniholdings 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 Muniholdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock Muniholdings has no effect on the direction of Platinum Asia i.e., Platinum Asia and Blackrock Muniholdings go up and down completely randomly.
Pair Corralation between Platinum Asia and Blackrock Muniholdings
Considering the 90-day investment horizon Platinum Asia is expected to generate 4.6 times less return on investment than Blackrock Muniholdings. In addition to that, Platinum Asia is 1.49 times more volatile than Blackrock Muniholdings Ca. It trades about 0.02 of its total potential returns per unit of risk. Blackrock Muniholdings Ca is currently generating about 0.14 per unit of volatility. If you would invest 1,050 in Blackrock Muniholdings Ca on October 23, 2024 and sell it today you would earn a total of 14.00 from holding Blackrock Muniholdings Ca or generate 1.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Platinum Asia Investments vs. Blackrock Muniholdings Ca
Performance |
| Timeline |
| Platinum Asia Investments |
| Blackrock Muniholdings |
Platinum Asia and Blackrock Muniholdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Platinum Asia and Blackrock Muniholdings
The main advantage of trading using opposite Platinum Asia and Blackrock Muniholdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Platinum Asia position performs unexpectedly, Blackrock Muniholdings 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 Muniholdings will offset losses from the drop in Blackrock Muniholdings' long position.| Platinum Asia vs. The Gabelli Dividend | Platinum Asia vs. Voya Global Advantage | Platinum Asia vs. Invesco California Value | Platinum Asia vs. John Hancock Investors |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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