Correlation Between RiverNorthDoubleLine and Pimco New

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

By analyzing existing cross correlation between RiverNorthDoubleLine Strategic Opportunity and Pimco New York, you can compare the effects of market volatilities on RiverNorthDoubleLine and Pimco New 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 RiverNorthDoubleLine with a short position of Pimco New. Check out your portfolio center. Please also check ongoing floating volatility patterns of RiverNorthDoubleLine and Pimco New.

Diversification Opportunities for RiverNorthDoubleLine and Pimco New

0.77

Correlation Coefficient

RiverNorthDoubleLine  Pimco New

Poor diversification

The 3 months correlation between RiverNorthDoubleLine and Pimco is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding RiverNorthDoubleLine Strategic and Pimco New York in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco New York and RiverNorthDoubleLine 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 RiverNorthDoubleLine Strategic Opportunity are associated (or correlated) with Pimco New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco New York has no effect on the direction of RiverNorthDoubleLine i.e., RiverNorthDoubleLine and Pimco New go up and down completely randomly.

Pair Corralation between RiverNorthDoubleLine and Pimco New

Considering the 90-day investment horizon RiverNorthDoubleLine Strategic Opportunity is expected to under-perform the Pimco New. But the etf apears to be less risky and, when comparing its historical volatility, RiverNorthDoubleLine Strategic Opportunity is 1.1 times less risky than Pimco New. The etf trades about -0.04 of its potential returns per unit of risk. The Pimco New York is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  597.00  in Pimco New York on September 3, 2024 and sell it today you would earn a total of  4.00  from holding Pimco New York or generate 0.67% return on investment over 90 days.

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

RiverNorthDoubleLine Strategic  vs.  Pimco New York

RiverNorthDoubleLine

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days RiverNorthDoubleLine Strategic Opportunity has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, RiverNorthDoubleLine is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pimco New York

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Pimco New York are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of very healthy basic indicators, Pimco New is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with RiverNorthDoubleLine and Pimco New

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

The idea behind RiverNorthDoubleLine Strategic Opportunity and Pimco New York 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.