Correlation Between Columbia Multi and PIMCO ETF
Can any of the company-specific risk be diversified away by investing in both Columbia Multi and PIMCO ETF 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 Columbia Multi and PIMCO ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Columbia Multi Sector Municipal and PIMCO ETF Trust, you can compare the effects of market volatilities on Columbia Multi and PIMCO ETF 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 Columbia Multi with a short position of PIMCO ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Columbia Multi and PIMCO ETF.
Diversification Opportunities for Columbia Multi and PIMCO ETF
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Columbia and PIMCO is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Columbia Multi Sector Municipa and PIMCO ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PIMCO ETF Trust and Columbia Multi 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 Columbia Multi Sector Municipal are associated (or correlated) with PIMCO ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PIMCO ETF Trust has no effect on the direction of Columbia Multi i.e., Columbia Multi and PIMCO ETF go up and down completely randomly.
Pair Corralation between Columbia Multi and PIMCO ETF
Given the investment horizon of 90 days Columbia Multi is expected to generate 1.7 times less return on investment than PIMCO ETF. In addition to that, Columbia Multi is 1.2 times more volatile than PIMCO ETF Trust. It trades about 0.04 of its total potential returns per unit of risk. PIMCO ETF Trust is currently generating about 0.08 per unit of volatility. If you would invest 4,065 in PIMCO ETF Trust on November 27, 2024 and sell it today you would earn a total of 482.00 from holding PIMCO ETF Trust or generate 11.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Columbia Multi Sector Municipa vs. PIMCO ETF Trust
Performance |
| Timeline |
| Columbia Multi Sector |
| PIMCO ETF Trust |
Columbia Multi and PIMCO ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Columbia Multi and PIMCO ETF
The main advantage of trading using opposite Columbia Multi and PIMCO ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Columbia Multi position performs unexpectedly, PIMCO ETF 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 ETF will offset losses from the drop in PIMCO ETF's long position.| Columbia Multi vs. IQ MacKay Municipal | Columbia Multi vs. IQ MacKay Municipal | Columbia Multi vs. American Century Diversified | Columbia Multi vs. Hartford Municipal Opportunities |
| PIMCO ETF vs. BlackRock Intermediate Muni | PIMCO ETF vs. IQ MacKay Municipal | PIMCO ETF vs. PIMCO Short Term | PIMCO ETF vs. iShares Short Maturity |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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