Correlation Between Pimco California and Munivest Fund
Can any of the company-specific risk be diversified away by investing in both Pimco California and Munivest Fund 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 California and Munivest Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pimco California Municipal and Munivest Fund, you can compare the effects of market volatilities on Pimco California and Munivest Fund 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 California with a short position of Munivest Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco California and Munivest Fund.
Diversification Opportunities for Pimco California and Munivest Fund
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Pimco and Munivest is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Pimco California Municipal and Munivest Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Munivest Fund and Pimco California 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 California Municipal are associated (or correlated) with Munivest Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Munivest Fund has no effect on the direction of Pimco California i.e., Pimco California and Munivest Fund go up and down completely randomly.
Pair Corralation between Pimco California and Munivest Fund
Considering the 90-day investment horizon Pimco California is expected to generate 12.66 times less return on investment than Munivest Fund. But when comparing it to its historical volatility, Pimco California Municipal is 1.03 times less risky than Munivest Fund. It trades about 0.01 of its potential returns per unit of risk. Munivest Fund is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 723.00 in Munivest Fund on August 31, 2024 and sell it today you would earn a total of 20.00 from holding Munivest Fund or generate 2.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pimco California Municipal vs. Munivest Fund
Performance |
| Timeline |
| Pimco California Mun |
| Munivest Fund |
Pimco California and Munivest Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pimco California and Munivest Fund
The main advantage of trading using opposite Pimco California and Munivest Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco California position performs unexpectedly, Munivest Fund 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 Munivest Fund will offset losses from the drop in Munivest Fund's long position.| Pimco California vs. MFS Investment Grade | Pimco California vs. Eaton Vance Municipal | Pimco California vs. DTF Tax Free | Pimco California vs. HUMANA INC |
| Munivest Fund vs. Blackrock Muniyield Quality | Munivest Fund vs. Blackrock Muniyield Quality | Munivest Fund vs. Blackrock Muniholdings Closed | Munivest Fund vs. Blackrock Muniholdings Quality |
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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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