Correlation Between Oklahoma Municipal and Pimco High
Can any of the company-specific risk be diversified away by investing in both Oklahoma Municipal and Pimco High 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 Oklahoma Municipal and Pimco High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oklahoma Municipal Fund and Pimco High Yield, you can compare the effects of market volatilities on Oklahoma Municipal and Pimco High 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 Oklahoma Municipal with a short position of Pimco High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oklahoma Municipal and Pimco High.
Diversification Opportunities for Oklahoma Municipal and Pimco High
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Oklahoma and Pimco is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Oklahoma Municipal Fund and Pimco High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco High Yield and Oklahoma Municipal 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 Oklahoma Municipal Fund are associated (or correlated) with Pimco High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco High Yield has no effect on the direction of Oklahoma Municipal i.e., Oklahoma Municipal and Pimco High go up and down completely randomly.
Pair Corralation between Oklahoma Municipal and Pimco High
Assuming the 90 days horizon Oklahoma Municipal is expected to generate 2.53 times less return on investment than Pimco High. But when comparing it to its historical volatility, Oklahoma Municipal Fund is 1.19 times less risky than Pimco High. It trades about 0.04 of its potential returns per unit of risk. Pimco High Yield is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 763.00 in Pimco High Yield on September 3, 2024 and sell it today you would earn a total of 102.00 from holding Pimco High Yield or generate 13.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oklahoma Municipal Fund vs. Pimco High Yield
Performance |
| Timeline |
| Oklahoma Municipal |
| Pimco High Yield |
Oklahoma Municipal and Pimco High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oklahoma Municipal and Pimco High
The main advantage of trading using opposite Oklahoma Municipal and Pimco High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oklahoma Municipal position performs unexpectedly, Pimco High 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 High will offset losses from the drop in Pimco High's long position.| Oklahoma Municipal vs. Limited Term Tax | Oklahoma Municipal vs. Calvert Short Duration | Oklahoma Municipal vs. Federated Short Term Income | Oklahoma Municipal vs. Jhancock Short Duration |
| Pimco High vs. Pimco Funds | Pimco High vs. Pimco Rae Worldwide | Pimco High vs. Pimco New York | Pimco High vs. Pimco New York |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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