Correlation Between MainStay CBRE and Pimco Dynamic

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

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

Diversification Opportunities for MainStay CBRE and Pimco Dynamic

0.03

Correlation Coefficient

MainStay CBRE  Pimco Dynamic

Significant diversification

The 3 months correlation between MainStay and Pimco is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding MainStay CBRE Global and Pimco Dynamic Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco Dynamic Income and MainStay CBRE 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 MainStay CBRE Global are associated (or correlated) with Pimco Dynamic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco Dynamic Income has no effect on the direction of MainStay CBRE i.e., MainStay CBRE and Pimco Dynamic go up and down completely randomly.

Pair Corralation between MainStay CBRE and Pimco Dynamic

Given the investment horizon of 90 days MainStay CBRE Global is expected to under-perform the Pimco Dynamic. In addition to that, MainStay CBRE is 2.2 times more volatile than Pimco Dynamic Income. It trades about -0.09 of its total potential returns per unit of risk. Pimco Dynamic Income is currently generating about 0.15 per unit of volatility. If you would invest  1,328  in Pimco Dynamic Income on November 28, 2024 and sell it today you would earn a total of  67.50  from holding Pimco Dynamic Income or generate 5.08% return on investment over 90 days.

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

MainStay CBRE Global  vs.  Pimco Dynamic Income

MainStay CBRE Global

Risk-Adjusted Performance

Very Weak

Over the last 90 days MainStay CBRE Global has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's technical and fundamental indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Pimco Dynamic Income

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Pimco Dynamic Income are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy fundamental indicators, Pimco Dynamic is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with MainStay CBRE and Pimco Dynamic

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

The idea behind MainStay CBRE Global and Pimco Dynamic 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.