Correlation Between City National and Pace Municipal
Can any of the company-specific risk be diversified away by investing in both City National and Pace Municipal 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 City National and Pace Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between City National Rochdale and Pace Municipal Fixed, you can compare the effects of market volatilities on City National and Pace Municipal 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 City National with a short position of Pace Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of City National and Pace Municipal.
Diversification Opportunities for City National and Pace Municipal
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between City and Pace is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding City National Rochdale and Pace Municipal Fixed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pace Municipal Fixed and City National 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 City National Rochdale are associated (or correlated) with Pace Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pace Municipal Fixed has no effect on the direction of City National i.e., City National and Pace Municipal go up and down completely randomly.
Pair Corralation between City National and Pace Municipal
Assuming the 90 days horizon City National Rochdale is expected to generate 6.27 times more return on investment than Pace Municipal. However, City National is 6.27 times more volatile than Pace Municipal Fixed. It trades about 0.05 of its potential returns per unit of risk. Pace Municipal Fixed is currently generating about 0.06 per unit of risk. If you would invest 2,666 in City National Rochdale on September 12, 2024 and sell it today you would earn a total of 311.00 from holding City National Rochdale or generate 11.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
City National Rochdale vs. Pace Municipal Fixed
Performance |
| Timeline |
| City National Rochdale |
| Pace Municipal Fixed |
City National and Pace Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with City National and Pace Municipal
The main advantage of trading using opposite City National and Pace Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if City National position performs unexpectedly, Pace Municipal 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 Pace Municipal will offset losses from the drop in Pace Municipal's long position.| City National vs. Pace Municipal Fixed | City National vs. Old Westbury Municipal | City National vs. Morningstar Municipal Bond | City National vs. Franklin High Yield |
| Pace Municipal vs. Scharf Global Opportunity | Pace Municipal vs. Ab Value Fund | Pace Municipal vs. Arrow Managed Futures | Pace Municipal vs. Materials Portfolio Fidelity |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
Other Complementary Tools
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation |