Correlation Between PIMCO Intermediate and SSGA Active
Can any of the company-specific risk be diversified away by investing in both PIMCO Intermediate and SSGA Active 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 SSGA Active 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 SSGA Active Trust, you can compare the effects of market volatilities on PIMCO Intermediate and SSGA Active 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 SSGA Active. Check out your portfolio center. Please also check ongoing floating volatility patterns of PIMCO Intermediate and SSGA Active.
Diversification Opportunities for PIMCO Intermediate and SSGA Active
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between PIMCO and SSGA is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding PIMCO Intermediate Municipal and SSGA Active Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SSGA Active Trust 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 SSGA Active. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SSGA Active Trust has no effect on the direction of PIMCO Intermediate i.e., PIMCO Intermediate and SSGA Active go up and down completely randomly.
Pair Corralation between PIMCO Intermediate and SSGA Active
Given the investment horizon of 90 days PIMCO Intermediate is expected to generate 1.25 times less return on investment than SSGA Active. In addition to that, PIMCO Intermediate is 1.37 times more volatile than SSGA Active Trust. It trades about 0.12 of its total potential returns per unit of risk. SSGA Active Trust is currently generating about 0.21 per unit of volatility. If you would invest 2,961 in SSGA Active Trust on August 29, 2024 and sell it today you would earn a total of 33.00 from holding SSGA Active Trust or generate 1.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
PIMCO Intermediate Municipal vs. SSGA Active Trust
Performance |
| Timeline |
| PIMCO Intermediate |
| SSGA Active Trust |
PIMCO Intermediate and SSGA Active Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PIMCO Intermediate and SSGA Active
The main advantage of trading using opposite PIMCO Intermediate and SSGA Active positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PIMCO Intermediate position performs unexpectedly, SSGA Active 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 SSGA Active will offset losses from the drop in SSGA Active's 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 |
| SSGA Active vs. SSGA Active Trust | SSGA Active vs. SSGA Active Trust | SSGA Active vs. SPDR Nuveen Municipal |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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