Correlation Between SPDR SP and PIMCO Intermediate
Can any of the company-specific risk be diversified away by investing in both SPDR SP and PIMCO Intermediate 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 SPDR SP and PIMCO Intermediate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR SP 500 and PIMCO Intermediate Municipal, you can compare the effects of market volatilities on SPDR SP and PIMCO Intermediate 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 SPDR SP with a short position of PIMCO Intermediate. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR SP and PIMCO Intermediate.
Diversification Opportunities for SPDR SP and PIMCO Intermediate
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SPDR and PIMCO is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding SPDR SP 500 and PIMCO Intermediate Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PIMCO Intermediate and SPDR SP 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 SPDR SP 500 are associated (or correlated) with PIMCO Intermediate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PIMCO Intermediate has no effect on the direction of SPDR SP i.e., SPDR SP and PIMCO Intermediate go up and down completely randomly.
Pair Corralation between SPDR SP and PIMCO Intermediate
Considering the 90-day investment horizon SPDR SP 500 is expected to generate 2.66 times more return on investment than PIMCO Intermediate. However, SPDR SP is 2.66 times more volatile than PIMCO Intermediate Municipal. It trades about 0.14 of its potential returns per unit of risk. PIMCO Intermediate Municipal is currently generating about 0.08 per unit of risk. If you would invest 57,799 in SPDR SP 500 on August 24, 2024 and sell it today you would earn a total of 1,568 from holding SPDR SP 500 or generate 2.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR SP 500 vs. PIMCO Intermediate Municipal
Performance |
| Timeline |
| SPDR SP 500 |
| PIMCO Intermediate |
SPDR SP and PIMCO Intermediate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR SP and PIMCO Intermediate
The main advantage of trading using opposite SPDR SP and PIMCO Intermediate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR SP position performs unexpectedly, PIMCO Intermediate 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 Intermediate will offset losses from the drop in PIMCO Intermediate's long position.| SPDR SP vs. SPDR Nuveen Municipal | SPDR SP vs. SPDR SP 400 | SPDR SP vs. SPDR SP 400 | SPDR SP vs. SPDR SP 1500 |
| PIMCO Intermediate vs. PIMCO Short Term | PIMCO Intermediate vs. VanEck Intermediate Muni | PIMCO Intermediate vs. VanEck Long Muni | PIMCO Intermediate vs. VanEck Short Muni |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
Other Complementary Tools
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Equity Valuation Check real value of public entities based on technical and fundamental data |