Correlation Between PIMCO ETF and JPMorgan Municipal
Can any of the company-specific risk be diversified away by investing in both PIMCO ETF and JPMorgan Municipal 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 JPMorgan Municipal 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 JPMorgan Municipal, you can compare the effects of market volatilities on PIMCO ETF and JPMorgan Municipal 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 JPMorgan Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of PIMCO ETF and JPMorgan Municipal.
Diversification Opportunities for PIMCO ETF and JPMorgan Municipal
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between PIMCO and JPMorgan is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding PIMCO ETF Trust and JPMorgan Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPMorgan Municipal 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 JPMorgan Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPMorgan Municipal has no effect on the direction of PIMCO ETF i.e., PIMCO ETF and JPMorgan Municipal go up and down completely randomly.
Pair Corralation between PIMCO ETF and JPMorgan Municipal
Given the investment horizon of 90 days PIMCO ETF Trust is expected to generate 1.33 times more return on investment than JPMorgan Municipal. However, PIMCO ETF is 1.33 times more volatile than JPMorgan Municipal. It trades about 0.1 of its potential returns per unit of risk. JPMorgan Municipal is currently generating about 0.09 per unit of risk. If you would invest 4,281 in PIMCO ETF Trust on August 26, 2024 and sell it today you would earn a total of 274.00 from holding PIMCO ETF Trust or generate 6.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
PIMCO ETF Trust vs. JPMorgan Municipal
Performance |
| Timeline |
| PIMCO ETF Trust |
| JPMorgan Municipal |
PIMCO ETF and JPMorgan Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PIMCO ETF and JPMorgan Municipal
The main advantage of trading using opposite PIMCO ETF and JPMorgan Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PIMCO ETF position performs unexpectedly, JPMorgan Municipal 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 JPMorgan Municipal will offset losses from the drop in JPMorgan Municipal'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 |
| JPMorgan Municipal vs. BlackRock Intermediate Muni | JPMorgan Municipal vs. SSGA Active Trust | JPMorgan Municipal vs. SPDR MarketAxess Investment | JPMorgan Municipal vs. SSGA Active Trust |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
Other Complementary Tools
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years |