Correlation Between Matson Money and Pimco Mortgage

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

By analyzing existing cross correlation between Matson Money Equity and Pimco Mortgage Opportunities, you can compare the effects of market volatilities on Matson Money and Pimco Mortgage 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 Matson Money with a short position of Pimco Mortgage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Matson Money and Pimco Mortgage.

Diversification Opportunities for Matson Money and Pimco Mortgage

-0.68

Correlation Coefficient

Matson Money  Pimco Mortgage

Excellent diversification

The 3 months correlation between Matson and Pimco is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Matson Money Equity and Pimco Mortgage Opportunities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco Mortgage Oppor and Matson Money 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 Matson Money Equity are associated (or correlated) with Pimco Mortgage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco Mortgage Oppor has no effect on the direction of Matson Money i.e., Matson Money and Pimco Mortgage go up and down completely randomly.

Pair Corralation between Matson Money and Pimco Mortgage

Assuming the 90 days horizon Matson Money Equity is expected to under-perform the Pimco Mortgage. In addition to that, Matson Money is 6.6 times more volatile than Pimco Mortgage Opportunities. It trades about -0.14 of its total potential returns per unit of risk. Pimco Mortgage Opportunities is currently generating about 0.22 per unit of volatility. If you would invest  905.00  in Pimco Mortgage Opportunities on December 22, 2024 and sell it today you would earn a total of  29.00  from holding Pimco Mortgage Opportunities or generate 3.2% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.36%
Values	Daily Returns

Matson Money Equity  vs.  Pimco Mortgage Opportunities

Matson Money Equity

Risk-Adjusted Performance

Very Weak

Over the last 90 days Matson Money Equity has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pimco Mortgage Oppor

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Pimco Mortgage Opportunities are ranked lower than 17 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Pimco Mortgage is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Matson Money and Pimco Mortgage

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

The idea behind Matson Money Equity and Pimco Mortgage Opportunities 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.