Correlation Between Diamond Hill and PIMCO Access

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

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

Diversification Opportunities for Diamond Hill and PIMCO Access

0.29

Correlation Coefficient

Diamond Hill  PIMCO Access

Modest diversification

The 3 months correlation between Diamond and PIMCO is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Diamond Hill Investment and PIMCO Access Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PIMCO Access Income and Diamond Hill 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 Diamond Hill Investment are associated (or correlated) with PIMCO Access. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PIMCO Access Income has no effect on the direction of Diamond Hill i.e., Diamond Hill and PIMCO Access go up and down completely randomly.

Pair Corralation between Diamond Hill and PIMCO Access

Given the investment horizon of 90 days Diamond Hill is expected to generate 1.21 times less return on investment than PIMCO Access. In addition to that, Diamond Hill is 1.71 times more volatile than PIMCO Access Income. It trades about 0.07 of its total potential returns per unit of risk. PIMCO Access Income is currently generating about 0.14 per unit of volatility. If you would invest  1,552  in PIMCO Access Income on September 2, 2024 and sell it today you would earn a total of  135.00  from holding PIMCO Access Income or generate 8.7% return on investment over 90 days.

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

Diamond Hill Investment  vs.  PIMCO Access Income

Diamond Hill Investment

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Diamond Hill Investment are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite quite unfluctuating forward indicators, Diamond Hill may actually be approaching a critical reversion point that can send shares even higher in January 2025.

PIMCO Access Income

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in PIMCO Access Income are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively abnormal basic indicators, PIMCO Access may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Diamond Hill and PIMCO Access

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

The idea behind Diamond Hill Investment and PIMCO Access Income 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 Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.