Correlation Between Blackrock Munivest and Putnam Premier

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

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

Diversification Opportunities for Blackrock Munivest and Putnam Premier

0.75

Correlation Coefficient

Blackrock Munivest  Putnam Premier

Poor diversification

The 3 months correlation between Blackrock and Putnam is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Blackrock Munivest and Putnam Premier Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam Premier Income and Blackrock Munivest 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 Munivest are associated (or correlated) with Putnam Premier. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putnam Premier Income has no effect on the direction of Blackrock Munivest i.e., Blackrock Munivest and Putnam Premier go up and down completely randomly.

Pair Corralation between Blackrock Munivest and Putnam Premier

Considering the 90-day investment horizon Blackrock Munivest is expected to generate 1.24 times more return on investment than Putnam Premier. However, Blackrock Munivest is 1.24 times more volatile than Putnam Premier Income. It trades about 0.19 of its potential returns per unit of risk. Putnam Premier Income is currently generating about 0.03 per unit of risk. If you would invest  1,096  in Blackrock Munivest on September 3, 2024 and sell it today you would earn a total of  31.00  from holding Blackrock Munivest or generate 2.83% return on investment over 90 days.

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

Blackrock Munivest  vs.  Putnam Premier Income

Blackrock Munivest

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Blackrock Munivest are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. 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.

Putnam Premier Income

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Putnam Premier Income has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Putnam Premier is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Blackrock Munivest and Putnam Premier

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

The idea behind Blackrock Munivest and Putnam Premier Income 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.