Correlation Between PIMCO Intermediate and SPDR MarketAxess
Can any of the company-specific risk be diversified away by investing in both PIMCO Intermediate and SPDR MarketAxess 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 Intermediate and SPDR MarketAxess into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PIMCO Intermediate Municipal and SPDR MarketAxess Investment, you can compare the effects of market volatilities on PIMCO Intermediate and SPDR MarketAxess 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 Intermediate with a short position of SPDR MarketAxess. Check out your portfolio center. Please also check ongoing floating volatility patterns of PIMCO Intermediate and SPDR MarketAxess.
Diversification Opportunities for PIMCO Intermediate and SPDR MarketAxess
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between PIMCO and SPDR is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding PIMCO Intermediate Municipal and SPDR MarketAxess Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR MarketAxess Inv and PIMCO Intermediate 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 Intermediate Municipal are associated (or correlated) with SPDR MarketAxess. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR MarketAxess Inv has no effect on the direction of PIMCO Intermediate i.e., PIMCO Intermediate and SPDR MarketAxess go up and down completely randomly.
Pair Corralation between PIMCO Intermediate and SPDR MarketAxess
Given the investment horizon of 90 days PIMCO Intermediate Municipal is expected to generate 0.61 times more return on investment than SPDR MarketAxess. However, PIMCO Intermediate Municipal is 1.64 times less risky than SPDR MarketAxess. It trades about 0.15 of its potential returns per unit of risk. SPDR MarketAxess Investment is currently generating about 0.09 per unit of risk. If you would invest 5,196 in PIMCO Intermediate Municipal on August 31, 2024 and sell it today you would earn a total of 55.00 from holding PIMCO Intermediate Municipal or generate 1.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
PIMCO Intermediate Municipal vs. SPDR MarketAxess Investment
Performance |
| Timeline |
| PIMCO Intermediate |
| SPDR MarketAxess Inv |
PIMCO Intermediate and SPDR MarketAxess Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PIMCO Intermediate and SPDR MarketAxess
The main advantage of trading using opposite PIMCO Intermediate and SPDR MarketAxess positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PIMCO Intermediate position performs unexpectedly, SPDR MarketAxess 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 SPDR MarketAxess will offset losses from the drop in SPDR MarketAxess' long position.| PIMCO Intermediate vs. PIMCO Short Term | PIMCO Intermediate vs. VanEck Intermediate Muni | PIMCO Intermediate vs. VanEck Long Muni | PIMCO Intermediate vs. VanEck Short Muni |
| SPDR MarketAxess vs. SSGA Active Trust | SPDR MarketAxess vs. SPDR Series Trust | SPDR MarketAxess vs. SPDR Bloomberg Barclays | SPDR MarketAxess 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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