Correlation Between SPDR Nuveen and PIMCO ETF
Can any of the company-specific risk be diversified away by investing in both SPDR Nuveen 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 SPDR Nuveen and PIMCO ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR Nuveen Municipal and PIMCO ETF Trust, you can compare the effects of market volatilities on SPDR Nuveen 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 SPDR Nuveen with a short position of PIMCO ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Nuveen and PIMCO ETF.
Diversification Opportunities for SPDR Nuveen and PIMCO ETF
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between SPDR and PIMCO is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Nuveen Municipal 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 SPDR Nuveen 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 SPDR Nuveen Municipal 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 SPDR Nuveen i.e., SPDR Nuveen and PIMCO ETF go up and down completely randomly.
Pair Corralation between SPDR Nuveen and PIMCO ETF
Given the investment horizon of 90 days SPDR Nuveen Municipal is expected to generate 0.85 times more return on investment than PIMCO ETF. However, SPDR Nuveen Municipal is 1.17 times less risky than PIMCO ETF. It trades about 0.13 of its potential returns per unit of risk. PIMCO ETF Trust is currently generating about 0.06 per unit of risk. If you would invest 2,754 in SPDR Nuveen Municipal on August 29, 2024 and sell it today you would earn a total of 25.00 from holding SPDR Nuveen Municipal or generate 0.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR Nuveen Municipal vs. PIMCO ETF Trust
Performance |
| Timeline |
| SPDR Nuveen Municipal |
| PIMCO ETF Trust |
SPDR Nuveen and PIMCO ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR Nuveen and PIMCO ETF
The main advantage of trading using opposite SPDR Nuveen and PIMCO ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Nuveen 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.| SPDR Nuveen vs. Mountain Commerce Bancorp | SPDR Nuveen vs. Magyar Bancorp | SPDR Nuveen vs. Nortech Systems Incorporated |
| 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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