Correlation Between Pimco Municipal and Blackrock Muniyield
Can any of the company-specific risk be diversified away by investing in both Pimco Municipal and Blackrock Muniyield 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 Municipal and Blackrock Muniyield into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pimco Municipal Income and Blackrock Muniyield Quality, you can compare the effects of market volatilities on Pimco Municipal and Blackrock Muniyield 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 Municipal with a short position of Blackrock Muniyield. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco Municipal and Blackrock Muniyield.
Diversification Opportunities for Pimco Municipal and Blackrock Muniyield
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Pimco and Blackrock is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Municipal Income and Blackrock Muniyield Quality in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Muniyield and Pimco 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 Pimco Municipal Income are associated (or correlated) with Blackrock Muniyield. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock Muniyield has no effect on the direction of Pimco Municipal i.e., Pimco Municipal and Blackrock Muniyield go up and down completely randomly.
Pair Corralation between Pimco Municipal and Blackrock Muniyield
Considering the 90-day investment horizon Pimco Municipal is expected to generate 10.71 times less return on investment than Blackrock Muniyield. In addition to that, Pimco Municipal is 1.43 times more volatile than Blackrock Muniyield Quality. It trades about 0.0 of its total potential returns per unit of risk. Blackrock Muniyield Quality is currently generating about 0.06 per unit of volatility. If you would invest 1,053 in Blackrock Muniyield Quality on September 5, 2024 and sell it today you would earn a total of 219.00 from holding Blackrock Muniyield Quality or generate 20.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pimco Municipal Income vs. Blackrock Muniyield Quality
Performance |
| Timeline |
| Pimco Municipal Income |
| Blackrock Muniyield |
Pimco Municipal and Blackrock Muniyield Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pimco Municipal and Blackrock Muniyield
The main advantage of trading using opposite Pimco Municipal and Blackrock Muniyield positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco Municipal position performs unexpectedly, Blackrock Muniyield 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 Blackrock Muniyield will offset losses from the drop in Blackrock Muniyield's long position.| Pimco Municipal vs. Blackrock Muniyield Quality | Pimco Municipal vs. Blackrock Muniyield Quality | Pimco Municipal vs. DTF Tax Free | Pimco Municipal vs. Blackrock Munivest |
| Blackrock Muniyield vs. DTF Tax Free | Blackrock Muniyield vs. DWS Municipal Income | Blackrock Muniyield vs. Blackrock Muni Intermediate | Blackrock Muniyield 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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