Correlation Between Blackrock Muniholdings and Pimco California
Can any of the company-specific risk be diversified away by investing in both Blackrock Muniholdings and Pimco California 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 Blackrock Muniholdings and Pimco California into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Blackrock Muniholdings Ca and Pimco California Municipal, you can compare the effects of market volatilities on Blackrock Muniholdings and Pimco California 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 Blackrock Muniholdings with a short position of Pimco California. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackrock Muniholdings and Pimco California.
Diversification Opportunities for Blackrock Muniholdings and Pimco California
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Blackrock and Pimco is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Blackrock Muniholdings Ca and Pimco California Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco California Mun and Blackrock Muniholdings 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 Blackrock Muniholdings Ca are associated (or correlated) with Pimco California. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco California Mun has no effect on the direction of Blackrock Muniholdings i.e., Blackrock Muniholdings and Pimco California go up and down completely randomly.
Pair Corralation between Blackrock Muniholdings and Pimco California
Considering the 90-day investment horizon Blackrock Muniholdings Ca is expected to generate 0.82 times more return on investment than Pimco California. However, Blackrock Muniholdings Ca is 1.22 times less risky than Pimco California. It trades about 0.04 of its potential returns per unit of risk. Pimco California Municipal is currently generating about -0.03 per unit of risk. If you would invest 1,099 in Blackrock Muniholdings Ca on August 28, 2024 and sell it today you would earn a total of 12.00 from holding Blackrock Muniholdings Ca or generate 1.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Blackrock Muniholdings Ca vs. Pimco California Municipal
Performance |
| Timeline |
| Blackrock Muniholdings |
| Pimco California Mun |
Blackrock Muniholdings and Pimco California Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Blackrock Muniholdings and Pimco California
The main advantage of trading using opposite Blackrock Muniholdings and Pimco California positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blackrock Muniholdings position performs unexpectedly, Pimco California 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 California will offset losses from the drop in Pimco California's long position.The idea behind Blackrock Muniholdings Ca and Pimco California Municipal pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
| Pimco California vs. Pimco California Municipal | Pimco California vs. Nuveen California Amt | Pimco California vs. Eaton Vance California | Pimco California vs. Invesco California Value |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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