Correlation Between Ishares Municipal and Pimco High
Can any of the company-specific risk be diversified away by investing in both Ishares Municipal and Pimco High 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 Pimco High 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 Pimco High Yield, you can compare the effects of market volatilities on Ishares Municipal and Pimco High 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 Pimco High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ishares Municipal and Pimco High.
Diversification Opportunities for Ishares Municipal and Pimco High
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Ishares and PIMCO is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Ishares Municipal Bond and Pimco High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco High Yield 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 Pimco High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco High Yield has no effect on the direction of Ishares Municipal i.e., Ishares Municipal and Pimco High go up and down completely randomly.
Pair Corralation between Ishares Municipal and Pimco High
Assuming the 90 days horizon Ishares Municipal is expected to generate 4.12 times less return on investment than Pimco High. In addition to that, Ishares Municipal is 1.12 times more volatile than Pimco High Yield. It trades about 0.04 of its total potential returns per unit of risk. Pimco High Yield is currently generating about 0.18 per unit of volatility. If you would invest 863.00 in Pimco High Yield on August 28, 2024 and sell it today you would earn a total of 62.00 from holding Pimco High Yield or generate 7.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.52% |
| Values | Daily Returns |
Ishares Municipal Bond vs. Pimco High Yield
Performance |
| Timeline |
| Ishares Municipal Bond |
| Pimco High Yield |
Ishares Municipal and Pimco High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ishares Municipal and Pimco High
The main advantage of trading using opposite Ishares Municipal and Pimco High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ishares Municipal position performs unexpectedly, Pimco High 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 High will offset losses from the drop in Pimco High's long position.| Ishares Municipal vs. Blackrock California Municipal | Ishares Municipal vs. Blackrock Balanced Capital | Ishares Municipal vs. Blackrock Eurofund Class | Ishares Municipal vs. Blackrock Funds |
| Pimco High vs. Pimco Rae Worldwide | Pimco High vs. Pimco Rae Worldwide | Pimco High vs. Pimco Rae Worldwide | Pimco High vs. Pimco Rae Worldwide |
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 Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
Other Complementary Tools
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. |