Correlation Between Pimco Emerging and High-yield Municipal
Can any of the company-specific risk be diversified away by investing in both Pimco Emerging and High-yield Municipal 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 Emerging and High-yield Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pimco Emerging Local and High Yield Municipal Fund, you can compare the effects of market volatilities on Pimco Emerging and High-yield Municipal 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 Emerging with a short position of High-yield Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco Emerging and High-yield Municipal.
Diversification Opportunities for Pimco Emerging and High-yield Municipal
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Pimco and High-yield is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Emerging Local and High Yield Municipal Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on High Yield Municipal and Pimco Emerging 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 Emerging Local are associated (or correlated) with High-yield Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of High Yield Municipal has no effect on the direction of Pimco Emerging i.e., Pimco Emerging and High-yield Municipal go up and down completely randomly.
Pair Corralation between Pimco Emerging and High-yield Municipal
Assuming the 90 days horizon Pimco Emerging is expected to generate 2.06 times less return on investment than High-yield Municipal. In addition to that, Pimco Emerging is 1.59 times more volatile than High Yield Municipal Fund. It trades about 0.03 of its total potential returns per unit of risk. High Yield Municipal Fund is currently generating about 0.09 per unit of volatility. If you would invest 817.00 in High Yield Municipal Fund on August 26, 2024 and sell it today you would earn a total of 78.00 from holding High Yield Municipal Fund or generate 9.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pimco Emerging Local vs. High Yield Municipal Fund
Performance |
| Timeline |
| Pimco Emerging Local |
| High Yield Municipal |
Pimco Emerging and High-yield Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pimco Emerging and High-yield Municipal
The main advantage of trading using opposite Pimco Emerging and High-yield Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco Emerging position performs unexpectedly, High-yield Municipal 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 High-yield Municipal will offset losses from the drop in High-yield Municipal's long position.| Pimco Emerging vs. Pimco Rae Worldwide | Pimco Emerging vs. Pimco Rae Worldwide | Pimco Emerging vs. Pimco Rae Worldwide | Pimco Emerging vs. Pimco Rae Worldwide |
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.
Other Complementary Tools
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. |