Correlation Between Pimco Energy and Us Government

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

By analyzing existing cross correlation between Pimco Energy Tactical and Us Government Securities, you can compare the effects of market volatilities on Pimco Energy and Us Government 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 Energy with a short position of Us Government. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco Energy and Us Government.

Diversification Opportunities for Pimco Energy and Us Government

-0.57

Correlation Coefficient

Pimco Energy  Us Government

Excellent diversification

The 3 months correlation between Pimco and AMUSX is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Energy Tactical and Us Government Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Us Government Securities and Pimco Energy 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 Energy Tactical are associated (or correlated) with Us Government. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Us Government Securities has no effect on the direction of Pimco Energy i.e., Pimco Energy and Us Government go up and down completely randomly.

Pair Corralation between Pimco Energy and Us Government

Considering the 90-day investment horizon Pimco Energy is expected to generate 4.35 times less return on investment than Us Government. In addition to that, Pimco Energy is 11.15 times more volatile than Us Government Securities. It trades about 0.0 of its total potential returns per unit of risk. Us Government Securities is currently generating about 0.16 per unit of volatility. If you would invest  1,163  in Us Government Securities on December 20, 2024 and sell it today you would earn a total of  36.00  from holding Us Government Securities or generate 3.1% return on investment over 90 days.

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

Pimco Energy Tactical  vs.  Us Government Securities

Pimco Energy Tactical

Risk-Adjusted Performance

Very Weak

Over the last 90 days Pimco Energy Tactical has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental indicators, Pimco Energy is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Us Government Securities

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Us Government Securities are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Us Government is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Pimco Energy and Us Government

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

The idea behind Pimco Energy Tactical and Us Government Securities 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.