Correlation Between Pimco New and Ft 7934

Can any of the company-specific risk be diversified away by investing in both Pimco New and Ft 7934 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 Ft 7934 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 Ft 7934 Corporate, you can compare the effects of market volatilities on Pimco New and Ft 7934 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 Ft 7934. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco New and Ft 7934.

Diversification Opportunities for Pimco New and Ft 7934

0.44

Correlation Coefficient

Pimco New  Ft 7934

Very weak diversification

The 3 months correlation between Pimco and FZNQEX is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Pimco New York and Ft 7934 Corporate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ft 7934 Corporate 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 Ft 7934. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ft 7934 Corporate has no effect on the direction of Pimco New i.e., Pimco New and Ft 7934 go up and down completely randomly.

Pair Corralation between Pimco New and Ft 7934

Assuming the 90 days horizon Pimco New York is expected to generate 2.31 times more return on investment than Ft 7934. However, Pimco New is 2.31 times more volatile than Ft 7934 Corporate. It trades about 0.01 of its potential returns per unit of risk. Ft 7934 Corporate is currently generating about -0.11 per unit of risk. If you would invest  1,073  in Pimco New York on October 25, 2024 and sell it today you would earn a total of  1.00  from holding Pimco New York or generate 0.09% return on investment over 90 days.

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

Pimco New York  vs.  Ft 7934 Corporate

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. In spite of fairly strong basic indicators, Pimco New is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Ft 7934 Corporate

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ft 7934 Corporate has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Ft 7934 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 New and Ft 7934

The main advantage of trading using opposite Pimco New and Ft 7934 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco New position performs unexpectedly, Ft 7934 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 Ft 7934 will offset losses from the drop in Ft 7934's long position.

The idea behind Pimco New York and Ft 7934 Corporate 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.