Correlation Between Multimedia Portfolio and Pimco Global

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

By analyzing existing cross correlation between Multimedia Portfolio Multimedia and Pimco Global Multi Asset, you can compare the effects of market volatilities on Multimedia Portfolio and Pimco Global 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 Multimedia Portfolio with a short position of Pimco Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Multimedia Portfolio and Pimco Global.

Diversification Opportunities for Multimedia Portfolio and Pimco Global

0.63

Correlation Coefficient

Multimedia Portfolio  Pimco Global

Poor diversification

The 3 months correlation between Multimedia and Pimco is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Multimedia Portfolio Multimedi and Pimco Global Multi Asset in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco Global Multi and Multimedia Portfolio 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 Multimedia Portfolio Multimedia are associated (or correlated) with Pimco Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco Global Multi has no effect on the direction of Multimedia Portfolio i.e., Multimedia Portfolio and Pimco Global go up and down completely randomly.

Pair Corralation between Multimedia Portfolio and Pimco Global

Assuming the 90 days horizon Multimedia Portfolio Multimedia is expected to generate 2.4 times more return on investment than Pimco Global. However, Multimedia Portfolio is 2.4 times more volatile than Pimco Global Multi Asset. It trades about 0.06 of its potential returns per unit of risk. Pimco Global Multi Asset is currently generating about 0.08 per unit of risk. If you would invest  9,620  in Multimedia Portfolio Multimedia on December 7, 2024 and sell it today you would earn a total of  1,548  from holding Multimedia Portfolio Multimedia or generate 16.09% return on investment over 90 days.

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

Multimedia Portfolio Multimedi  vs.  Pimco Global Multi Asset

Multimedia Portfolio

Risk-Adjusted Performance

Very Weak

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

Pimco Global Multi

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Pimco Global Multi Asset are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Pimco Global is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Multimedia Portfolio and Pimco Global

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

The idea behind Multimedia Portfolio Multimedia and Pimco Global Multi Asset 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.