Correlation Between Ishares Municipal and 1290 Doubleline
Can any of the company-specific risk be diversified away by investing in both Ishares Municipal and 1290 Doubleline 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 1290 Doubleline 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 1290 Doubleline Dynamic, you can compare the effects of market volatilities on Ishares Municipal and 1290 Doubleline 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 1290 Doubleline. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ishares Municipal and 1290 Doubleline.
Diversification Opportunities for Ishares Municipal and 1290 Doubleline
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ishares and 1290 is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Ishares Municipal Bond and 1290 Doubleline Dynamic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 1290 Doubleline Dynamic 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 1290 Doubleline. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 1290 Doubleline Dynamic has no effect on the direction of Ishares Municipal i.e., Ishares Municipal and 1290 Doubleline go up and down completely randomly.
Pair Corralation between Ishares Municipal and 1290 Doubleline
Assuming the 90 days horizon Ishares Municipal Bond is expected to generate 1.26 times more return on investment than 1290 Doubleline. However, Ishares Municipal is 1.26 times more volatile than 1290 Doubleline Dynamic. It trades about 0.08 of its potential returns per unit of risk. 1290 Doubleline Dynamic is currently generating about 0.01 per unit of risk. If you would invest 1,108 in Ishares Municipal Bond on September 13, 2024 and sell it today you would earn a total of 10.00 from holding Ishares Municipal Bond or generate 0.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ishares Municipal Bond vs. 1290 Doubleline Dynamic
Performance |
| Timeline |
| Ishares Municipal Bond |
| 1290 Doubleline Dynamic |
Ishares Municipal and 1290 Doubleline Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ishares Municipal and 1290 Doubleline
The main advantage of trading using opposite Ishares Municipal and 1290 Doubleline positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ishares Municipal position performs unexpectedly, 1290 Doubleline 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 1290 Doubleline will offset losses from the drop in 1290 Doubleline'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 |
| 1290 Doubleline vs. 1290 Funds | 1290 Doubleline vs. 1290 Essex Small | 1290 Doubleline vs. 1290 Funds | 1290 Doubleline vs. 1290 Smartbeta Equity |
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.
Other Complementary Tools
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas |