Correlation Between Pioneer Municipal and Western Asset
Can any of the company-specific risk be diversified away by investing in both Pioneer Municipal and Western Asset 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 Pioneer Municipal and Western Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pioneer Municipal High and Western Asset High, you can compare the effects of market volatilities on Pioneer Municipal and Western Asset 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 Pioneer Municipal with a short position of Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pioneer Municipal and Western Asset.
Diversification Opportunities for Pioneer Municipal and Western Asset
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Pioneer and Western is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Pioneer Municipal High and Western Asset High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset High and Pioneer Municipal 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 Pioneer Municipal High are associated (or correlated) with Western Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Asset High has no effect on the direction of Pioneer Municipal i.e., Pioneer Municipal and Western Asset go up and down completely randomly.
Pair Corralation between Pioneer Municipal and Western Asset
Considering the 90-day investment horizon Pioneer Municipal is expected to generate 1.3 times less return on investment than Western Asset. In addition to that, Pioneer Municipal is 1.21 times more volatile than Western Asset High. It trades about 0.04 of its total potential returns per unit of risk. Western Asset High is currently generating about 0.06 per unit of volatility. If you would invest 999.00 in Western Asset High on August 27, 2024 and sell it today you would earn a total of 217.00 from holding Western Asset High or generate 21.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pioneer Municipal High vs. Western Asset High
Performance |
| Timeline |
| Pioneer Municipal High |
| Western Asset High |
Pioneer Municipal and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pioneer Municipal and Western Asset
The main advantage of trading using opposite Pioneer Municipal and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pioneer Municipal position performs unexpectedly, Western Asset 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 Western Asset will offset losses from the drop in Western Asset's long position.| Pioneer Municipal vs. New America High | Pioneer Municipal vs. DWS Municipal Income | Pioneer Municipal vs. RiverNorth Specialty Finance | Pioneer Municipal vs. Putnam Managed Municipal |
| Western Asset vs. Western Asset Global | Western Asset vs. Western Asset High | Western Asset vs. Voya Global Advantage | Western Asset vs. Voya Global 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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