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 High and Pioneer Municipal Highome, 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
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Western and Pioneer is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset High and Pioneer Municipal Highome in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pioneer Municipal Highome 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 High 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 Highome 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 High is expected to under-perform the Pioneer Municipal. But the fund apears to be less risky and, when comparing its historical volatility, Western Asset High is 1.25 times less risky than Pioneer Municipal. The fund trades about -0.26 of its potential returns per unit of risk. The Pioneer Municipal Highome is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 1,183 in Pioneer Municipal Highome on October 23, 2024 and sell it today you would earn a total of 17.00 from holding Pioneer Municipal Highome or generate 1.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.74% |
| Values | Daily Returns |
Western Asset High vs. Pioneer Municipal Highome
Performance |
| Timeline |
| Western Asset High |
| Pioneer Municipal Highome |
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 Global | Western Asset vs. Western Asset Global | Western Asset vs. European Equity Closed | Western Asset vs. Western Asset High |
| Pioneer Municipal vs. Brandywineglobal Globalome Opportunities | Pioneer Municipal vs. Western Asset Global | Pioneer Municipal vs. Pioneer Floating Rate | Pioneer Municipal vs. Nuveen Core 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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