Correlation Between IMGP DBi and Aa Pimco

Can any of the company-specific risk be diversified away by investing in both IMGP DBi and Aa Pimco 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 IMGP DBi and Aa Pimco into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between iMGP DBi Managed and Aa Pimco Tr, you can compare the effects of market volatilities on IMGP DBi and Aa Pimco 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 IMGP DBi with a short position of Aa Pimco. Check out your portfolio center. Please also check ongoing floating volatility patterns of IMGP DBi and Aa Pimco.

Diversification Opportunities for IMGP DBi and Aa Pimco

0.37

Correlation Coefficient

IMGP DBi  Aa Pimco

Weak diversification

The 3 months correlation between IMGP and PQTIX is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding iMGP DBi Managed and Aa Pimco Tr in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aa Pimco Tr and IMGP DBi 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 iMGP DBi Managed are associated (or correlated) with Aa Pimco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aa Pimco Tr has no effect on the direction of IMGP DBi i.e., IMGP DBi and Aa Pimco go up and down completely randomly.

Pair Corralation between IMGP DBi and Aa Pimco

Given the investment horizon of 90 days iMGP DBi Managed is expected to under-perform the Aa Pimco. But the etf apears to be less risky and, when comparing its historical volatility, iMGP DBi Managed is 1.14 times less risky than Aa Pimco. The etf trades about -0.04 of its potential returns per unit of risk. The Aa Pimco Tr is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest  1,016  in Aa Pimco Tr on September 20, 2024 and sell it today you would earn a total of  34.00  from holding Aa Pimco Tr or generate 3.35% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.45%
Values	Daily Returns

iMGP DBi Managed  vs.  Aa Pimco Tr

iMGP DBi Managed

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days iMGP DBi Managed has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable primary indicators, IMGP DBi is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Aa Pimco Tr

Risk-Adjusted Performance

1 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Aa Pimco Tr are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Aa Pimco is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with IMGP DBi and Aa Pimco

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

The idea behind iMGP DBi Managed and Aa Pimco Tr 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.