Correlation Between Pimco New and Pimco Municipal
Can any of the company-specific risk be diversified away by investing in both Pimco New and Pimco 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 New and Pimco Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pimco New York and Pimco Municipal Income, you can compare the effects of market volatilities on Pimco New and Pimco 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 New with a short position of Pimco Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco New and Pimco Municipal.
Diversification Opportunities for Pimco New and Pimco Municipal
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Pimco and Pimco is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Pimco New York and Pimco Municipal Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco Municipal Income and Pimco New 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 New York are associated (or correlated) with Pimco Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco Municipal Income has no effect on the direction of Pimco New i.e., Pimco New and Pimco Municipal go up and down completely randomly.
Pair Corralation between Pimco New and Pimco Municipal
Considering the 90-day investment horizon Pimco New is expected to generate 1.99 times less return on investment than Pimco Municipal. But when comparing it to its historical volatility, Pimco New York is 1.19 times less risky than Pimco Municipal. It trades about 0.04 of its potential returns per unit of risk. Pimco Municipal Income is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 779.00 in Pimco Municipal Income on September 2, 2024 and sell it today you would earn a total of 109.00 from holding Pimco Municipal Income or generate 13.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pimco New York vs. Pimco Municipal Income
Performance |
| Timeline |
| Pimco New York |
| Pimco Municipal Income |
Pimco New and Pimco Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pimco New and Pimco Municipal
The main advantage of trading using opposite Pimco New and Pimco Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco New position performs unexpectedly, Pimco 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 Pimco Municipal will offset losses from the drop in Pimco Municipal's long position.| Pimco New vs. Invesco Pennsylvania Value | Pimco New vs. Blackrock Muniholdings Ny | Pimco New vs. Eaton Vance National | Pimco New vs. Nuveen New York |
| Pimco Municipal vs. Pimco Municipal Income | Pimco Municipal vs. Nuveen Municipal High | Pimco Municipal vs. Nuveen Amt Free Municipal | Pimco Municipal 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
Other Complementary Tools
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios |