Correlation Between Nasdaq and Pimco Global

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

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

Diversification Opportunities for Nasdaq and Pimco Global

0.36

Correlation Coefficient

Nasdaq  Pimco Global

Weak diversification

The 3 months correlation between Nasdaq and Pimco is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq Inc 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 Nasdaq 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 Nasdaq Inc 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 Nasdaq i.e., Nasdaq and Pimco Global go up and down completely randomly.

Pair Corralation between Nasdaq and Pimco Global

Given the investment horizon of 90 days Nasdaq Inc is expected to generate 2.54 times more return on investment than Pimco Global. However, Nasdaq is 2.54 times more volatile than Pimco Global Multi Asset. It trades about 0.13 of its potential returns per unit of risk. Pimco Global Multi Asset is currently generating about 0.0 per unit of risk. If you would invest  7,279  in Nasdaq Inc on September 28, 2024 and sell it today you would earn a total of  633.00  from holding Nasdaq Inc 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

Nasdaq Inc  vs.  Pimco Global Multi Asset

Nasdaq Inc

Risk-Adjusted Performance

10 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Nasdaq Inc are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady basic indicators, Nasdaq may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pimco Global Multi

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pimco Global Multi Asset has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental 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 Nasdaq and Pimco Global

The main advantage of trading using opposite Nasdaq and Pimco Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nasdaq 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 Nasdaq Inc 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.