Correlation Between BlackRock Intermediate and PIMCO ETF
Can any of the company-specific risk be diversified away by investing in both BlackRock Intermediate and PIMCO ETF 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 BlackRock Intermediate and PIMCO ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BlackRock Intermediate Muni and PIMCO ETF Trust, you can compare the effects of market volatilities on BlackRock Intermediate and PIMCO ETF 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 BlackRock Intermediate with a short position of PIMCO ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of BlackRock Intermediate and PIMCO ETF.
Diversification Opportunities for BlackRock Intermediate and PIMCO ETF
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between BlackRock and PIMCO is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding BlackRock Intermediate Muni and PIMCO ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PIMCO ETF Trust and BlackRock Intermediate 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 BlackRock Intermediate Muni are associated (or correlated) with PIMCO ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PIMCO ETF Trust has no effect on the direction of BlackRock Intermediate i.e., BlackRock Intermediate and PIMCO ETF go up and down completely randomly.
Pair Corralation between BlackRock Intermediate and PIMCO ETF
Given the investment horizon of 90 days BlackRock Intermediate Muni is expected to generate 0.81 times more return on investment than PIMCO ETF. However, BlackRock Intermediate Muni is 1.24 times less risky than PIMCO ETF. It trades about -0.03 of its potential returns per unit of risk. PIMCO ETF Trust is currently generating about -0.03 per unit of risk. If you would invest 2,395 in BlackRock Intermediate Muni on August 29, 2024 and sell it today you would lose (8.00) from holding BlackRock Intermediate Muni or give up 0.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
BlackRock Intermediate Muni vs. PIMCO ETF Trust
Performance |
| Timeline |
| BlackRock Intermediate |
| PIMCO ETF Trust |
BlackRock Intermediate and PIMCO ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BlackRock Intermediate and PIMCO ETF
The main advantage of trading using opposite BlackRock Intermediate and PIMCO ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BlackRock Intermediate position performs unexpectedly, PIMCO ETF 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 PIMCO ETF will offset losses from the drop in PIMCO ETF's long position.| BlackRock Intermediate vs. SSGA Active Trust | BlackRock Intermediate vs. SSGA Active Trust | BlackRock Intermediate vs. SPDR Nuveen Municipal |
| PIMCO ETF vs. BlackRock Intermediate Muni | PIMCO ETF vs. SSGA Active Trust | PIMCO ETF vs. SSGA Active Trust | PIMCO ETF vs. SPDR Nuveen 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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