Correlation Between Pimco Commodityrealret and Icon Information

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

By analyzing existing cross correlation between Pimco Commodityrealreturn Strategy and Icon Information Technology, you can compare the effects of market volatilities on Pimco Commodityrealret and Icon Information 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 Commodityrealret with a short position of Icon Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco Commodityrealret and Icon Information.

Diversification Opportunities for Pimco Commodityrealret and Icon Information

-0.2

Correlation Coefficient

Pimco Commodityrealret  Icon Information

Good diversification

The 3 months correlation between Pimco and Icon is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Commodityrealreturn Stra and Icon Information Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Icon Information Tec and Pimco Commodityrealret 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 Commodityrealreturn Strategy are associated (or correlated) with Icon Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Icon Information Tec has no effect on the direction of Pimco Commodityrealret i.e., Pimco Commodityrealret and Icon Information go up and down completely randomly.

Pair Corralation between Pimco Commodityrealret and Icon Information

Assuming the 90 days horizon Pimco Commodityrealreturn Strategy is expected to generate 0.56 times more return on investment than Icon Information. However, Pimco Commodityrealreturn Strategy is 1.78 times less risky than Icon Information. It trades about 0.26 of its potential returns per unit of risk. Icon Information Technology is currently generating about -0.11 per unit of risk. If you would invest  1,268  in Pimco Commodityrealreturn Strategy on December 19, 2024 and sell it today you would earn a total of  139.00  from holding Pimco Commodityrealreturn Strategy or generate 10.96% return on investment over 90 days.

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

Pimco Commodityrealreturn Stra  vs.  Icon Information Technology

Pimco Commodityrealret

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Pimco Commodityrealreturn Strategy are ranked lower than 20 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Pimco Commodityrealret may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Icon Information Tec

Risk-Adjusted Performance

Very Weak

Over the last 90 days Icon Information Technology has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Pimco Commodityrealret and Icon Information

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

The idea behind Pimco Commodityrealreturn Strategy and Icon Information Technology 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.