Correlation Between Western Asset and Pioneer Municipal
Can any of the company-specific risk be diversified away by investing in both Western Asset and Pioneer 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 Western Asset and Pioneer Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Asset Global and Pioneer Municipal High, you can compare the effects of market volatilities on Western Asset and Pioneer 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 Western Asset with a short position of Pioneer Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Pioneer Municipal.
Diversification Opportunities for Western Asset and Pioneer Municipal
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Western and Pioneer is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Global and Pioneer Municipal High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pioneer Municipal High and Western Asset 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 Western Asset Global are associated (or correlated) with Pioneer Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pioneer Municipal High has no effect on the direction of Western Asset i.e., Western Asset and Pioneer Municipal go up and down completely randomly.
Pair Corralation between Western Asset and Pioneer Municipal
Considering the 90-day investment horizon Western Asset is expected to generate 2.3 times less return on investment than Pioneer Municipal. In addition to that, Western Asset is 1.15 times more volatile than Pioneer Municipal High. It trades about 0.05 of its total potential returns per unit of risk. Pioneer Municipal High is currently generating about 0.13 per unit of volatility. If you would invest 927.00 in Pioneer Municipal High on August 24, 2024 and sell it today you would earn a total of 17.00 from holding Pioneer Municipal High or generate 1.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Asset Global vs. Pioneer Municipal High
Performance |
| Timeline |
| Western Asset Global |
| Pioneer Municipal High |
Western Asset and Pioneer Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Pioneer Municipal
The main advantage of trading using opposite Western Asset and Pioneer Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, Pioneer 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 Pioneer Municipal will offset losses from the drop in Pioneer Municipal's long position.| Western Asset vs. Western Asset High | Western Asset vs. BNY Mellon High | Western Asset vs. Allspring Income Opportunities | Western Asset vs. Allianzgi Convertible Income |
| Pioneer Municipal vs. Nuveen Mortgage Opportunity | Pioneer Municipal vs. Western Asset Investment | Pioneer Municipal vs. Western Asset Global | Pioneer Municipal vs. MFS Municipal Income |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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