Correlation Between Macquariefirst and Pimco Corporate

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

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

Diversification Opportunities for Macquariefirst and Pimco Corporate

0.71

Correlation Coefficient

Macquariefirst  Pimco Corporate

Poor diversification

The 3 months correlation between Macquariefirst and Pimco is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Macquariefirst Tr Global and Pimco Corporate Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco Corporate Income and Macquariefirst 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 Macquariefirst Tr Global are associated (or correlated) with Pimco Corporate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco Corporate Income has no effect on the direction of Macquariefirst i.e., Macquariefirst and Pimco Corporate go up and down completely randomly.

Pair Corralation between Macquariefirst and Pimco Corporate

Considering the 90-day investment horizon Macquariefirst is expected to generate 1.08 times less return on investment than Pimco Corporate. In addition to that, Macquariefirst is 1.28 times more volatile than Pimco Corporate Income. It trades about 0.1 of its total potential returns per unit of risk. Pimco Corporate Income is currently generating about 0.14 per unit of volatility. If you would invest  1,112  in Pimco Corporate Income on September 13, 2024 and sell it today you would earn a total of  298.00  from holding Pimco Corporate Income or generate 26.8% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	77.42%
Values	Daily Returns

Macquariefirst Tr Global  vs.  Pimco Corporate Income

Macquariefirst Tr Global

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Macquariefirst Tr Global has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the fund shareholders.

Pimco Corporate Income

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Pimco Corporate Income are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of very healthy fundamental indicators, Pimco Corporate is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Macquariefirst and Pimco Corporate

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

The idea behind Macquariefirst Tr Global and Pimco Corporate 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..