Correlation Between SPDR Nuveen and PIMCO Intermediate
Can any of the company-specific risk be diversified away by investing in both SPDR Nuveen and PIMCO Intermediate 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 Intermediate 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 Intermediate Municipal, you can compare the effects of market volatilities on SPDR Nuveen and PIMCO Intermediate 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 Intermediate. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Nuveen and PIMCO Intermediate.
Diversification Opportunities for SPDR Nuveen and PIMCO Intermediate
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between SPDR and PIMCO is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Nuveen Municipal and PIMCO Intermediate Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PIMCO Intermediate 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 Intermediate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PIMCO Intermediate has no effect on the direction of SPDR Nuveen i.e., SPDR Nuveen and PIMCO Intermediate go up and down completely randomly.
Pair Corralation between SPDR Nuveen and PIMCO Intermediate
Given the investment horizon of 90 days SPDR Nuveen Municipal is expected to generate 0.97 times more return on investment than PIMCO Intermediate. However, SPDR Nuveen Municipal is 1.03 times less risky than PIMCO Intermediate. It trades about 0.16 of its potential returns per unit of risk. PIMCO Intermediate Municipal is currently generating about 0.12 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 32.00 from holding SPDR Nuveen Municipal or generate 1.16% 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 Intermediate Municipal
Performance |
| Timeline |
| SPDR Nuveen Municipal |
| PIMCO Intermediate |
SPDR Nuveen and PIMCO Intermediate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR Nuveen and PIMCO Intermediate
The main advantage of trading using opposite SPDR Nuveen and PIMCO Intermediate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Nuveen position performs unexpectedly, PIMCO Intermediate 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 Intermediate will offset losses from the drop in PIMCO Intermediate's long position.| SPDR Nuveen vs. Mountain Commerce Bancorp | SPDR Nuveen vs. Magyar Bancorp | SPDR Nuveen vs. Nortech Systems Incorporated |
| PIMCO Intermediate vs. PIMCO Short Term | PIMCO Intermediate vs. VanEck Intermediate Muni | PIMCO Intermediate vs. VanEck Long Muni | PIMCO Intermediate vs. VanEck Short Muni |
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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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