Correlation Between Pimco New and Blackrock Enhanced

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

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

Diversification Opportunities for Pimco New and Blackrock Enhanced

-0.68

Correlation Coefficient

Pimco New  Blackrock Enhanced

Excellent diversification

The 3 months correlation between Pimco and Blackrock is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Pimco New York and Blackrock Enhanced Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Enhanced and Pimco New 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 New York are associated (or correlated) with Blackrock Enhanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock Enhanced has no effect on the direction of Pimco New i.e., Pimco New and Blackrock Enhanced go up and down completely randomly.

Pair Corralation between Pimco New and Blackrock Enhanced

Considering the 90-day investment horizon Pimco New York is expected to under-perform the Blackrock Enhanced. But the fund apears to be less risky and, when comparing its historical volatility, Pimco New York is 1.36 times less risky than Blackrock Enhanced. The fund trades about -0.23 of its potential returns per unit of risk. The Blackrock Enhanced Capital is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  1,946  in Blackrock Enhanced Capital on October 22, 2024 and sell it today you would earn a total of  115.00  from holding Blackrock Enhanced Capital or generate 5.91% return on investment over 90 days.

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

Pimco New York  vs.  Blackrock Enhanced Capital

Pimco New York

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pimco New York has generated negative risk-adjusted returns adding no value to fund investors. Despite latest abnormal performance, the Fund's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the mutual fund stockholders.

Blackrock Enhanced

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Blackrock Enhanced Capital are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. Despite fairly strong forward indicators, Blackrock Enhanced is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Pimco New and Blackrock Enhanced

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

The idea behind Pimco New York and Blackrock Enhanced Capital 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 Stocks Directory module to find actively traded stocks across global markets.