Correlation Between Ishares Municipal and City National
Can any of the company-specific risk be diversified away by investing in both Ishares Municipal and City National 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 City National 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 City National Rochdale, you can compare the effects of market volatilities on Ishares Municipal and City National 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 City National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ishares Municipal and City National.
Diversification Opportunities for Ishares Municipal and City National
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Ishares and City is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Ishares Municipal Bond and City National Rochdale in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on City National Rochdale 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 City National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of City National Rochdale has no effect on the direction of Ishares Municipal i.e., Ishares Municipal and City National go up and down completely randomly.
Pair Corralation between Ishares Municipal and City National
If you would invest 1,105 in Ishares Municipal Bond on September 13, 2024 and sell it today you would earn a total of 13.00 from holding Ishares Municipal Bond or generate 1.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ishares Municipal Bond vs. City National Rochdale
Performance |
| Timeline |
| Ishares Municipal Bond |
| City National Rochdale |
Ishares Municipal and City National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ishares Municipal and City National
The main advantage of trading using opposite Ishares Municipal and City National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ishares Municipal position performs unexpectedly, City National 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 City National will offset losses from the drop in City National's long position.| Ishares Municipal vs. Calamos Dynamic Convertible | Ishares Municipal vs. Allianzgi Convertible Income | Ishares Municipal vs. Fidelity Sai Convertible | Ishares Municipal vs. Absolute Convertible Arbitrage |
| City National vs. Ishares Municipal Bond | City National vs. T Rowe Price | City National vs. Pace High Yield | City National vs. Morningstar Defensive Bond |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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