Correlation Between PIMCO Investment and BondBloxx ETF

Can any of the company-specific risk be diversified away by investing in both PIMCO Investment and BondBloxx ETF 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 Investment and BondBloxx ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between PIMCO Investment Grade and BondBloxx ETF Trust, you can compare the effects of market volatilities on PIMCO Investment and BondBloxx ETF 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 Investment with a short position of BondBloxx ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of PIMCO Investment and BondBloxx ETF.

Diversification Opportunities for PIMCO Investment and BondBloxx ETF

0.84

Correlation Coefficient

PIMCO Investment  BondBloxx ETF

Very poor diversification

The 3 months correlation between PIMCO and BondBloxx is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding PIMCO Investment Grade and BondBloxx ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BondBloxx ETF Trust and PIMCO Investment 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 Investment Grade are associated (or correlated) with BondBloxx ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BondBloxx ETF Trust has no effect on the direction of PIMCO Investment i.e., PIMCO Investment and BondBloxx ETF go up and down completely randomly.

Pair Corralation between PIMCO Investment and BondBloxx ETF

Given the investment horizon of 90 days PIMCO Investment Grade is expected to generate 1.08 times more return on investment than BondBloxx ETF. However, PIMCO Investment is 1.08 times more volatile than BondBloxx ETF Trust. It trades about 0.11 of its potential returns per unit of risk. BondBloxx ETF Trust is currently generating about 0.11 per unit of risk. If you would invest  9,451  in PIMCO Investment Grade on December 29, 2024 and sell it today you would earn a total of  205.00  from holding PIMCO Investment Grade or generate 2.17% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.39%
Values	Daily Returns

PIMCO Investment Grade  vs.  BondBloxx ETF Trust

PIMCO Investment Grade

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in PIMCO Investment Grade are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, PIMCO Investment is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

BondBloxx ETF Trust

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in BondBloxx ETF Trust are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong fundamental drivers, BondBloxx ETF is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with PIMCO Investment and BondBloxx ETF

The main advantage of trading using opposite PIMCO Investment and BondBloxx ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PIMCO Investment position performs unexpectedly, BondBloxx ETF 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 BondBloxx ETF will offset losses from the drop in BondBloxx ETF's long position.

The idea behind PIMCO Investment Grade and BondBloxx ETF Trust 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.