Correlation Between PIMCO ETF and BlackRock Intermediate
Can any of the company-specific risk be diversified away by investing in both PIMCO ETF and BlackRock 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 PIMCO ETF and BlackRock Intermediate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PIMCO ETF Trust and BlackRock Intermediate Muni, you can compare the effects of market volatilities on PIMCO ETF and BlackRock 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 PIMCO ETF with a short position of BlackRock Intermediate. Check out your portfolio center. Please also check ongoing floating volatility patterns of PIMCO ETF and BlackRock Intermediate.
Diversification Opportunities for PIMCO ETF and BlackRock Intermediate
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between PIMCO and BlackRock is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding PIMCO ETF Trust and BlackRock Intermediate Muni in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BlackRock Intermediate and PIMCO ETF 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 PIMCO ETF Trust are associated (or correlated) with BlackRock Intermediate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BlackRock Intermediate has no effect on the direction of PIMCO ETF i.e., PIMCO ETF and BlackRock Intermediate go up and down completely randomly.
Pair Corralation between PIMCO ETF and BlackRock Intermediate
Given the investment horizon of 90 days PIMCO ETF is expected to generate 1.21 times less return on investment than BlackRock Intermediate. In addition to that, PIMCO ETF is 1.03 times more volatile than BlackRock Intermediate Muni. It trades about 0.01 of its total potential returns per unit of risk. BlackRock Intermediate Muni is currently generating about 0.02 per unit of volatility. If you would invest 2,356 in BlackRock Intermediate Muni on October 25, 2024 and sell it today you would earn a total of 6.50 from holding BlackRock Intermediate Muni or generate 0.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
PIMCO ETF Trust vs. BlackRock Intermediate Muni
Performance |
| Timeline |
| PIMCO ETF Trust |
| BlackRock Intermediate |
PIMCO ETF and BlackRock Intermediate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PIMCO ETF and BlackRock Intermediate
The main advantage of trading using opposite PIMCO ETF and BlackRock Intermediate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PIMCO ETF position performs unexpectedly, BlackRock 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 BlackRock Intermediate will offset losses from the drop in BlackRock Intermediate's long position.| PIMCO ETF vs. BlackRock Intermediate Muni | PIMCO ETF vs. IQ MacKay Municipal | PIMCO ETF vs. PIMCO Short Term | PIMCO ETF vs. iShares Short Maturity |
| BlackRock Intermediate vs. BlackRock High Yield | BlackRock Intermediate vs. iShares iBonds Dec | BlackRock Intermediate vs. iShares Short Maturity | BlackRock Intermediate vs. iShares iBonds Dec |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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