Correlation Between New America and Pioneer Municipal
Can any of the company-specific risk be diversified away by investing in both New America 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 New America and Pioneer Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between New America High and Pioneer Municipal High, you can compare the effects of market volatilities on New America 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 New America with a short position of Pioneer Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of New America and Pioneer Municipal.
Diversification Opportunities for New America and Pioneer Municipal
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between New and Pioneer is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding New America High 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 New America 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 New America 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 High has no effect on the direction of New America i.e., New America and Pioneer Municipal go up and down completely randomly.
Pair Corralation between New America and Pioneer Municipal
Considering the 90-day investment horizon New America High is expected to generate 0.88 times more return on investment than Pioneer Municipal. However, New America High is 1.14 times less risky than Pioneer Municipal. It trades about 0.09 of its potential returns per unit of risk. Pioneer Municipal High is currently generating about 0.03 per unit of risk. If you would invest 623.00 in New America High on August 27, 2024 and sell it today you would earn a total of 204.00 from holding New America High or generate 32.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
New America High vs. Pioneer Municipal High
Performance |
| Timeline |
| New America High |
| Pioneer Municipal High |
New America and Pioneer Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New America and Pioneer Municipal
The main advantage of trading using opposite New America and Pioneer Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New America 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.| New America vs. Pioneer Municipal High | New America vs. DWS Municipal Income | New America vs. RiverNorth Specialty Finance | New America vs. Putnam Managed Municipal |
| Pioneer Municipal vs. New America High | Pioneer Municipal vs. DWS Municipal Income | Pioneer Municipal vs. RiverNorth Specialty Finance | Pioneer Municipal vs. Putnam Managed Municipal |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
Other Complementary Tools
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets |