Correlation Between Pimco Real and Calvert Green

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

By analyzing existing cross correlation between Pimco Real Return and Calvert Green Bond, you can compare the effects of market volatilities on Pimco Real and Calvert Green 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 Real with a short position of Calvert Green. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco Real and Calvert Green.

Diversification Opportunities for Pimco Real and Calvert Green

0.94

Correlation Coefficient

Pimco Real  Calvert Green

Almost no diversification

The 3 months correlation between Pimco and Calvert is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Real Return and Calvert Green Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calvert Green Bond and Pimco Real 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 Real Return are associated (or correlated) with Calvert Green. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calvert Green Bond has no effect on the direction of Pimco Real i.e., Pimco Real and Calvert Green go up and down completely randomly.

Pair Corralation between Pimco Real and Calvert Green

Assuming the 90 days horizon Pimco Real Return is expected to under-perform the Calvert Green. In addition to that, Pimco Real is 2.5 times more volatile than Calvert Green Bond. It trades about -0.33 of its total potential returns per unit of risk. Calvert Green Bond is currently generating about -0.22 per unit of volatility. If you would invest  1,404  in Calvert Green Bond on September 28, 2024 and sell it today you would lose (16.00) from holding Calvert Green Bond or give up 1.14% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	95.24%
Values	Daily Returns

Pimco Real Return  vs.  Calvert Green Bond

Pimco Real Return

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pimco Real Return has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Calvert Green Bond

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Calvert Green Bond has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, Calvert Green 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 Real and Calvert Green

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

The idea behind Pimco Real Return and Calvert Green Bond 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.