Correlation Between Pimco International and Pimco Stocksplus
Can any of the company-specific risk be diversified away by investing in both Pimco International and Pimco Stocksplus 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 International and Pimco Stocksplus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pimco International Bond and Pimco Stocksplus Short, you can compare the effects of market volatilities on Pimco International and Pimco Stocksplus 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 International with a short position of Pimco Stocksplus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco International and Pimco Stocksplus.
Diversification Opportunities for Pimco International and Pimco Stocksplus
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Pimco and Pimco is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Pimco International Bond and Pimco Stocksplus Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco Stocksplus Short and Pimco International 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 International Bond are associated (or correlated) with Pimco Stocksplus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco Stocksplus Short has no effect on the direction of Pimco International i.e., Pimco International and Pimco Stocksplus go up and down completely randomly.
Pair Corralation between Pimco International and Pimco Stocksplus
Assuming the 90 days horizon Pimco International Bond is expected to under-perform the Pimco Stocksplus. But the mutual fund apears to be less risky and, when comparing its historical volatility, Pimco International Bond is 2.22 times less risky than Pimco Stocksplus. The mutual fund trades about -0.01 of its potential returns per unit of risk. The Pimco Stocksplus Short is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 685.00 in Pimco Stocksplus Short on December 1, 2024 and sell it today you would earn a total of 39.00 from holding Pimco Stocksplus Short or generate 5.69% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Pimco International Bond vs. Pimco Stocksplus Short
Performance |
Timeline |
Pimco International Bond |
Pimco Stocksplus Short |
Pimco International and Pimco Stocksplus Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Pimco International and Pimco Stocksplus
The main advantage of trading using opposite Pimco International and Pimco Stocksplus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco International position performs unexpectedly, Pimco Stocksplus 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 Pimco Stocksplus will offset losses from the drop in Pimco Stocksplus' long position.Pimco International vs. Pimco Rae Worldwide | Pimco International vs. Pimco Rae Worldwide | Pimco International vs. Pimco Rae Worldwide | Pimco International vs. Pimco Rae Worldwide |
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Check out your portfolio center.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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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