Correlation Between Pimco Capital and Commodityrealreturn

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

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

Diversification Opportunities for Pimco Capital and Commodityrealreturn

0.71

Correlation Coefficient

Pimco Capital  Commodityrealreturn

Poor diversification

The 3 months correlation between Pimco and Commodityrealreturn is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Capital Sec and Commodityrealreturn Strategy F in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Commodityrealreturn and Pimco Capital 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 Capital Sec are associated (or correlated) with Commodityrealreturn. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Commodityrealreturn has no effect on the direction of Pimco Capital i.e., Pimco Capital and Commodityrealreturn go up and down completely randomly.

Pair Corralation between Pimco Capital and Commodityrealreturn

Assuming the 90 days horizon Pimco Capital is expected to generate 1.89 times less return on investment than Commodityrealreturn. But when comparing it to its historical volatility, Pimco Capital Sec is 6.48 times less risky than Commodityrealreturn. It trades about 0.21 of its potential returns per unit of risk. Commodityrealreturn Strategy Fund is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  1,130  in Commodityrealreturn Strategy Fund on September 3, 2024 and sell it today you would earn a total of  35.00  from holding Commodityrealreturn Strategy Fund or generate 3.1% return on investment over 90 days.

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

Pimco Capital Sec  vs.  Commodityrealreturn Strategy F

Pimco Capital Sec

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Pimco Capital Sec are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Pimco Capital is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Commodityrealreturn

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Commodityrealreturn Strategy Fund are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Commodityrealreturn 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 Capital and Commodityrealreturn

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

The idea behind Pimco Capital Sec and Commodityrealreturn Strategy Fund 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.