Correlation Between Ab Municipal and Pimco Trends
Can any of the company-specific risk be diversified away by investing in both Ab Municipal and Pimco Trends 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 Ab Municipal and Pimco Trends into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab Municipal Bond and Pimco Trends Managed, you can compare the effects of market volatilities on Ab Municipal and Pimco Trends 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 Ab Municipal with a short position of Pimco Trends. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Municipal and Pimco Trends.
Diversification Opportunities for Ab Municipal and Pimco Trends
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AUNYX and Pimco is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Ab Municipal Bond and Pimco Trends Managed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco Trends Managed and Ab Municipal 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 Ab Municipal Bond are associated (or correlated) with Pimco Trends. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco Trends Managed has no effect on the direction of Ab Municipal i.e., Ab Municipal and Pimco Trends go up and down completely randomly.
Pair Corralation between Ab Municipal and Pimco Trends
Assuming the 90 days horizon Ab Municipal Bond is expected to generate 0.26 times more return on investment than Pimco Trends. However, Ab Municipal Bond is 3.85 times less risky than Pimco Trends. It trades about 0.11 of its potential returns per unit of risk. Pimco Trends Managed is currently generating about -0.03 per unit of risk. If you would invest 1,047 in Ab Municipal Bond on August 28, 2024 and sell it today you would earn a total of 34.00 from holding Ab Municipal Bond or generate 3.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ab Municipal Bond vs. Pimco Trends Managed
Performance |
| Timeline |
| Ab Municipal Bond |
| Pimco Trends Managed |
Ab Municipal and Pimco Trends Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Municipal and Pimco Trends
The main advantage of trading using opposite Ab Municipal and Pimco Trends positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Municipal position performs unexpectedly, Pimco Trends 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 Pimco Trends will offset losses from the drop in Pimco Trends' long position.| Ab Municipal vs. Ab Global E | Ab Municipal vs. Ab Global E | Ab Municipal vs. Ab Minnesota Portfolio | Ab Municipal vs. Ab All Market |
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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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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