Correlation Between Princeton Capital and Blackrock Muniyield

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

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

Diversification Opportunities for Princeton Capital and Blackrock Muniyield

-0.13

Correlation Coefficient

Princeton Capital  Blackrock Muniyield

Good diversification

The 3 months correlation between Princeton and Blackrock is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Princeton Capital and Blackrock Muniyield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Muniyield and Princeton Capital 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 Princeton Capital 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 Princeton Capital i.e., Princeton Capital and Blackrock Muniyield go up and down completely randomly.

Pair Corralation between Princeton Capital and Blackrock Muniyield

If you would invest  31.00  in Princeton Capital on January 30, 2024 and sell it today you would earn a total of  0.00  from holding Princeton Capital or generate 0.0% return on investment over 90 days.

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

Princeton Capital  vs.  Blackrock Muniyield

Princeton Capital

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Princeton Capital are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather inconsistent basic indicators, Princeton Capital exhibited solid returns over the last few months and may actually be approaching a breakup point.

Blackrock Muniyield

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Blackrock Muniyield are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of rather sound basic indicators, Blackrock Muniyield is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Princeton Capital and Blackrock Muniyield

The main advantage of trading using opposite Princeton Capital and Blackrock Muniyield positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Princeton Capital 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 Princeton Capital 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.