Correlation Between Ishares Municipal and Managed Account
Can any of the company-specific risk be diversified away by investing in both Ishares Municipal and Managed Account 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 Ishares Municipal and Managed Account into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ishares Municipal Bond and Managed Account Series, you can compare the effects of market volatilities on Ishares Municipal and Managed Account 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 Ishares Municipal with a short position of Managed Account. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ishares Municipal and Managed Account.
Diversification Opportunities for Ishares Municipal and Managed Account
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Ishares and Managed is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Ishares Municipal Bond and Managed Account Series in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Managed Account Series and Ishares 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 Ishares Municipal Bond are associated (or correlated) with Managed Account. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Managed Account Series has no effect on the direction of Ishares Municipal i.e., Ishares Municipal and Managed Account go up and down completely randomly.
Pair Corralation between Ishares Municipal and Managed Account
Assuming the 90 days horizon Ishares Municipal is expected to generate 1.99 times less return on investment than Managed Account. But when comparing it to its historical volatility, Ishares Municipal Bond is 1.33 times less risky than Managed Account. It trades about 0.08 of its potential returns per unit of risk. Managed Account Series is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 828.00 in Managed Account Series on September 5, 2024 and sell it today you would earn a total of 72.00 from holding Managed Account Series or generate 8.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.6% |
| Values | Daily Returns |
Ishares Municipal Bond vs. Managed Account Series
Performance |
| Timeline |
| Ishares Municipal Bond |
| Managed Account Series |
Ishares Municipal and Managed Account Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ishares Municipal and Managed Account
The main advantage of trading using opposite Ishares Municipal and Managed Account positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ishares Municipal position performs unexpectedly, Managed Account 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 Managed Account will offset losses from the drop in Managed Account's long position.| Ishares Municipal vs. Calamos Market Neutral | Ishares Municipal vs. Shelton Emerging Markets | Ishares Municipal vs. Transamerica Emerging Markets | Ishares Municipal vs. Rbc Emerging Markets |
| Managed Account vs. Issachar Fund Class | Managed Account vs. Semiconductor Ultrasector Profund | Managed Account vs. Eic Value Fund | Managed Account vs. Nasdaq 100 Fund Class |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios |