Correlation Between Aam/himco Short and Pimco International

Can any of the company-specific risk be diversified away by investing in both Aam/himco Short and Pimco International 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 Aam/himco Short and Pimco International into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Aamhimco Short Duration and Pimco International Bond, you can compare the effects of market volatilities on Aam/himco Short and Pimco International 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 Aam/himco Short with a short position of Pimco International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aam/himco Short and Pimco International.

Diversification Opportunities for Aam/himco Short and Pimco International

0.44

Correlation Coefficient

Aam/himco Short  Pimco International

Very weak diversification

The 3 months correlation between Aam/himco and Pimco is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Aamhimco Short Duration and Pimco International Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco International Bond and Aam/himco Short 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 Aamhimco Short Duration are associated (or correlated) with Pimco International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco International Bond has no effect on the direction of Aam/himco Short i.e., Aam/himco Short and Pimco International go up and down completely randomly.

Pair Corralation between Aam/himco Short and Pimco International

Assuming the 90 days horizon Aamhimco Short Duration is expected to generate 0.41 times more return on investment than Pimco International. However, Aamhimco Short Duration is 2.46 times less risky than Pimco International. It trades about -0.17 of its potential returns per unit of risk. Pimco International Bond is currently generating about -0.48 per unit of risk. If you would invest  1,004  in Aamhimco Short Duration on October 9, 2024 and sell it today you would lose (4.00) from holding Aamhimco Short Duration or give up 0.4% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Aamhimco Short Duration  vs.  Pimco International Bond

Aamhimco Short Duration

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aamhimco Short Duration has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Aam/himco Short is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pimco International Bond

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pimco International Bond has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Pimco International is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Aam/himco Short and Pimco International

The main advantage of trading using opposite Aam/himco Short and Pimco International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aam/himco Short position performs unexpectedly, Pimco International 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 International will offset losses from the drop in Pimco International's long position.

The idea behind Aamhimco Short Duration and Pimco International Bond pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..