Correlation Between Pimco Short and Ancora/thelen Small-mid

Can any of the company-specific risk be diversified away by investing in both Pimco Short and Ancora/thelen Small-mid 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 Pimco Short and Ancora/thelen Small-mid into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Pimco Short Asset and Ancorathelen Small Mid Cap, you can compare the effects of market volatilities on Pimco Short and Ancora/thelen Small-mid 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 Pimco Short with a short position of Ancora/thelen Small-mid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco Short and Ancora/thelen Small-mid.

Diversification Opportunities for Pimco Short and Ancora/thelen Small-mid

0.76

Correlation Coefficient

Pimco Short  Ancora/thelen Small-mid

Poor diversification

The 3 months correlation between Pimco and Ancora/thelen is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Short Asset and Ancorathelen Small Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ancora/thelen Small-mid and Pimco Short 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 Pimco Short Asset are associated (or correlated) with Ancora/thelen Small-mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ancora/thelen Small-mid has no effect on the direction of Pimco Short i.e., Pimco Short and Ancora/thelen Small-mid go up and down completely randomly.

Pair Corralation between Pimco Short and Ancora/thelen Small-mid

Assuming the 90 days horizon Pimco Short is expected to generate 15.39 times less return on investment than Ancora/thelen Small-mid. But when comparing it to its historical volatility, Pimco Short Asset is 13.38 times less risky than Ancora/thelen Small-mid. It trades about 0.19 of its potential returns per unit of risk. Ancorathelen Small Mid Cap is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  1,965  in Ancorathelen Small Mid Cap on September 4, 2024 and sell it today you would earn a total of  294.00  from holding Ancorathelen Small Mid Cap or generate 14.96% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

Pimco Short Asset  vs.  Ancorathelen Small Mid Cap

Pimco Short Asset

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Pimco Short Asset are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Pimco Short is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Ancora/thelen Small-mid

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Ancorathelen Small Mid Cap are ranked lower than 17 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Ancora/thelen Small-mid showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Pimco Short and Ancora/thelen Small-mid

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

The idea behind Pimco Short Asset and Ancorathelen Small Mid Cap 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.

Check out your portfolio center.

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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.