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 Investment 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
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Western and Pioneer is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Investment 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 Investment 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 17.89 times less return on investment than Pioneer Municipal. But when comparing it to its historical volatility, Western Asset Investment is 1.14 times less risky than Pioneer Municipal. It trades about 0.01 of its potential returns per unit of risk. Pioneer Municipal High is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 837.00 in Pioneer Municipal High on November 3, 2024 and sell it today you would earn a total of 107.00 from holding Pioneer Municipal High or generate 12.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Western Asset Investment vs. Pioneer Municipal High
Performance |
| Timeline |
| Western Asset Investment |
| 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. Pioneer Floating Rate | Western Asset vs. The Gabelli Equity | Western Asset vs. Pioneer Municipal High | Western Asset vs. Nuveen Global High |
| 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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