Correlation Between Pimco Energy and Sa Mkt

Can any of the company-specific risk be diversified away by investing in both Pimco Energy and Sa Mkt 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 Sa Mkt 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 Sa Mkt Fd, you can compare the effects of market volatilities on Pimco Energy and Sa Mkt 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 Sa Mkt. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco Energy and Sa Mkt.

Diversification Opportunities for Pimco Energy and Sa Mkt

0.11

Correlation Coefficient

Pimco Energy  Sa Mkt

Average diversification

The 3 months correlation between Pimco and SAMKX is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Energy Tactical and Sa Mkt Fd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sa Mkt Fd 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 Sa Mkt. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sa Mkt Fd has no effect on the direction of Pimco Energy i.e., Pimco Energy and Sa Mkt go up and down completely randomly.

Pair Corralation between Pimco Energy and Sa Mkt

Considering the 90-day investment horizon Pimco Energy Tactical is expected to generate 6.77 times more return on investment than Sa Mkt. However, Pimco Energy is 6.77 times more volatile than Sa Mkt Fd. It trades about 0.06 of its potential returns per unit of risk. Sa Mkt Fd is currently generating about 0.09 per unit of risk. If you would invest  2,634  in Pimco Energy Tactical on October 27, 2024 and sell it today you would earn a total of  85.00  from holding Pimco Energy Tactical or generate 3.23% return on investment over 90 days.

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

Pimco Energy Tactical  vs.  Sa Mkt Fd

Pimco Energy Tactical

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Pimco Energy Tactical are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Pimco Energy showed solid returns over the last few months and may actually be approaching a breakup point.

Sa Mkt Fd

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Sa Mkt Fd are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward-looking signals, Sa Mkt 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 Sa Mkt

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

The idea behind Pimco Energy Tactical and Sa Mkt Fd 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.