Correlation Between Pimco Flexible and Lsv Small

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

By analyzing existing cross correlation between Pimco Flexible Credit and Lsv Small Cap, you can compare the effects of market volatilities on Pimco Flexible and Lsv Small 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 Flexible with a short position of Lsv Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco Flexible and Lsv Small.

Diversification Opportunities for Pimco Flexible and Lsv Small

0.73

Correlation Coefficient

Pimco Flexible  Lsv Small

Poor diversification

The 3 months correlation between Pimco and Lsv is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Flexible Credit and Lsv Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lsv Small Cap and Pimco Flexible 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 Flexible Credit are associated (or correlated) with Lsv Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lsv Small Cap has no effect on the direction of Pimco Flexible i.e., Pimco Flexible and Lsv Small go up and down completely randomly.

Pair Corralation between Pimco Flexible and Lsv Small

Assuming the 90 days horizon Pimco Flexible Credit is expected to generate 0.23 times more return on investment than Lsv Small. However, Pimco Flexible Credit is 4.28 times less risky than Lsv Small. It trades about 0.12 of its potential returns per unit of risk. Lsv Small Cap is currently generating about 0.03 per unit of risk. If you would invest  598.00  in Pimco Flexible Credit on October 11, 2024 and sell it today you would earn a total of  109.00  from holding Pimco Flexible Credit or generate 18.23% return on investment over 90 days.

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

Pimco Flexible Credit  vs.  Lsv Small Cap

Pimco Flexible Credit

Risk-Adjusted Performance

0 of 100

Very Weak

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

Lsv Small Cap

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lsv Small Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Lsv Small 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 Flexible and Lsv Small

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

The idea behind Pimco Flexible Credit and Lsv Small 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.

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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.