Correlation Between Pimco Energy and Thrivent Natural

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

Diversification Opportunities for Pimco Energy and Thrivent Natural

0.83

Correlation Coefficient

Pimco Energy  Thrivent Natural

Very poor diversification

The 3 months correlation between Pimco and Thrivent is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Energy Tactical and Thrivent Natural Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thrivent Natural Res 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 Thrivent Natural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thrivent Natural Res has no effect on the direction of Pimco Energy i.e., Pimco Energy and Thrivent Natural go up and down completely randomly.

Pair Corralation between Pimco Energy and Thrivent Natural

Considering the 90-day investment horizon Pimco Energy Tactical is expected to generate 79.77 times more return on investment than Thrivent Natural. However, Pimco Energy is 79.77 times more volatile than Thrivent Natural Resources. It trades about 0.28 of its potential returns per unit of risk. Thrivent Natural Resources is currently generating about 0.48 per unit of risk. If you would invest  2,580  in Pimco Energy Tactical on October 23, 2024 and sell it today you would earn a total of  620.00  from holding Pimco Energy Tactical or generate 24.03% return on investment over 90 days.

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

Pimco Energy Tactical  vs.  Thrivent Natural Resources

Pimco Energy Tactical

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Pimco Energy Tactical are ranked lower than 17 (%) 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.

Thrivent Natural Res

Risk-Adjusted Performance

29 of 100

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Thrivent Natural Resources are ranked lower than 29 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Thrivent Natural 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 Thrivent Natural

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

The idea behind Pimco Energy Tactical and Thrivent Natural Resources 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.