Correlation Between PIMCO Mortgage and UBS

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

By analyzing existing cross correlation between PIMCO Mortgage Backed Securities and UBS, you can compare the effects of market volatilities on PIMCO Mortgage and UBS 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 Mortgage with a short position of UBS. Check out your portfolio center. Please also check ongoing floating volatility patterns of PIMCO Mortgage and UBS.

Diversification Opportunities for PIMCO Mortgage and UBS

0.0

Correlation Coefficient

PIMCO Mortgage  UBS

Pay attention - limited upside

The 3 months correlation between PIMCO and UBS is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding PIMCO Mortgage Backed Securiti and UBS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UBS and PIMCO Mortgage 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 Mortgage Backed Securities are associated (or correlated) with UBS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UBS has no effect on the direction of PIMCO Mortgage i.e., PIMCO Mortgage and UBS go up and down completely randomly.

Pair Corralation between PIMCO Mortgage and UBS

If you would invest (100.00) in UBS on October 1, 2024 and sell it today you would earn a total of  100.00  from holding UBS or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

PIMCO Mortgage Backed Securiti  vs.  UBS

PIMCO Mortgage Backed

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PIMCO Mortgage Backed Securities has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable fundamental drivers, PIMCO Mortgage is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

UBS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days UBS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, UBS is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with PIMCO Mortgage and UBS

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

The idea behind PIMCO Mortgage Backed Securities and UBS 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.