Correlation Between Pimco Stocksplus and Nuveen High

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

By analyzing existing cross correlation between Pimco Stocksplus Ar and Nuveen High Income, you can compare the effects of market volatilities on Pimco Stocksplus and Nuveen High 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 Stocksplus with a short position of Nuveen High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco Stocksplus and Nuveen High.

Diversification Opportunities for Pimco Stocksplus and Nuveen High

-0.1

Correlation Coefficient

Pimco Stocksplus  Nuveen High

Good diversification

The 3 months correlation between Pimco and Nuveen is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Stocksplus Ar and Nuveen High Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen High Income and Pimco Stocksplus 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 Stocksplus Ar are associated (or correlated) with Nuveen High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen High Income has no effect on the direction of Pimco Stocksplus i.e., Pimco Stocksplus and Nuveen High go up and down completely randomly.

Pair Corralation between Pimco Stocksplus and Nuveen High

Assuming the 90 days horizon Pimco Stocksplus Ar is expected to generate 5.02 times more return on investment than Nuveen High. However, Pimco Stocksplus is 5.02 times more volatile than Nuveen High Income. It trades about 0.13 of its potential returns per unit of risk. Nuveen High Income is currently generating about 0.06 per unit of risk. If you would invest  624.00  in Pimco Stocksplus Ar on December 29, 2024 and sell it today you would earn a total of  50.00  from holding Pimco Stocksplus Ar or generate 8.01% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

Pimco Stocksplus Ar  vs.  Nuveen High Income

Pimco Stocksplus

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Pimco Stocksplus Ar are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Pimco Stocksplus may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Nuveen High Income

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Nuveen High Income are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Nuveen High 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 Stocksplus and Nuveen High

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

The idea behind Pimco Stocksplus Ar and Nuveen High Income 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.