Correlation Between Pimco New and Gabelli Dividend

Can any of the company-specific risk be diversified away by investing in both Pimco New and Gabelli Dividend 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 Gabelli Dividend 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 The Gabelli Dividend, you can compare the effects of market volatilities on Pimco New and Gabelli Dividend 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 Gabelli Dividend. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco New and Gabelli Dividend.

Diversification Opportunities for Pimco New and Gabelli Dividend

0.54

Correlation Coefficient

Pimco New  Gabelli Dividend

Very weak diversification

The 3 months correlation between Pimco and Gabelli is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Pimco New York and The Gabelli Dividend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gabelli Dividend 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 Gabelli Dividend. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gabelli Dividend has no effect on the direction of Pimco New i.e., Pimco New and Gabelli Dividend go up and down completely randomly.

Pair Corralation between Pimco New and Gabelli Dividend

Considering the 90-day investment horizon Pimco New York is expected to generate 1.05 times more return on investment than Gabelli Dividend. However, Pimco New is 1.05 times more volatile than The Gabelli Dividend. It trades about -0.04 of its potential returns per unit of risk. The Gabelli Dividend is currently generating about -0.1 per unit of risk. If you would invest  790.00  in Pimco New York on November 29, 2024 and sell it today you would lose (14.00) from holding Pimco New York or give up 1.77% of portfolio value over 90 days.

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

Pimco New York  vs.  The Gabelli Dividend

Pimco New York

Risk-Adjusted Performance

Very Weak

Over the last 90 days Pimco New York has generated negative risk-adjusted returns adding no value to fund investors. Despite nearly stable basic indicators, Pimco New is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Gabelli Dividend

Risk-Adjusted Performance

Very Weak

Over the last 90 days The Gabelli Dividend has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Gabelli Dividend is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Pimco New and Gabelli Dividend

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

The idea behind Pimco New York and The Gabelli Dividend 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.