Correlation Between Ab Municipal and Pimco Unconstrained
Can any of the company-specific risk be diversified away by investing in both Ab Municipal and Pimco Unconstrained 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 Ab Municipal and Pimco Unconstrained into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab Municipal Bond and Pimco Unconstrained Bond, you can compare the effects of market volatilities on Ab Municipal and Pimco Unconstrained 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 Ab Municipal with a short position of Pimco Unconstrained. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Municipal and Pimco Unconstrained.
Diversification Opportunities for Ab Municipal and Pimco Unconstrained
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between AUNYX and Pimco is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Ab Municipal Bond and Pimco Unconstrained Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco Unconstrained Bond and Ab 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 Ab Municipal Bond are associated (or correlated) with Pimco Unconstrained. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco Unconstrained Bond has no effect on the direction of Ab Municipal i.e., Ab Municipal and Pimco Unconstrained go up and down completely randomly.
Pair Corralation between Ab Municipal and Pimco Unconstrained
Assuming the 90 days horizon Ab Municipal is expected to generate 9.5 times less return on investment than Pimco Unconstrained. But when comparing it to its historical volatility, Ab Municipal Bond is 1.33 times less risky than Pimco Unconstrained. It trades about 0.04 of its potential returns per unit of risk. Pimco Unconstrained Bond is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 1,024 in Pimco Unconstrained Bond on August 13, 2025 and sell it today you would earn a total of 9.00 from holding Pimco Unconstrained Bond or generate 0.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ab Municipal Bond vs. Pimco Unconstrained Bond
Performance |
| Timeline |
| Ab Municipal Bond |
| Pimco Unconstrained Bond |
Ab Municipal and Pimco Unconstrained Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Municipal and Pimco Unconstrained
The main advantage of trading using opposite Ab Municipal and Pimco Unconstrained positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Municipal position performs unexpectedly, Pimco Unconstrained 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 Unconstrained will offset losses from the drop in Pimco Unconstrained's long position.| Ab Municipal vs. Growth Opportunities Fund | Ab Municipal vs. Qs Defensive Growth | Ab Municipal vs. Riverparknext Century Growth | Ab Municipal vs. Qs Moderate Growth |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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