Correlation Between Pimco Rae and Pimco Stocksplus
Can any of the company-specific risk be diversified away by investing in both Pimco Rae and Pimco Stocksplus 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 Rae and Pimco Stocksplus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pimco Rae Plus and Pimco Stocksplus Short, you can compare the effects of market volatilities on Pimco Rae and Pimco Stocksplus 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 Rae with a short position of Pimco Stocksplus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco Rae and Pimco Stocksplus.
Diversification Opportunities for Pimco Rae and Pimco Stocksplus
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Pimco and Pimco is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Rae Plus and Pimco Stocksplus Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco Stocksplus Short and Pimco Rae 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 Rae Plus are associated (or correlated) with Pimco Stocksplus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco Stocksplus Short has no effect on the direction of Pimco Rae i.e., Pimco Rae and Pimco Stocksplus go up and down completely randomly.
Pair Corralation between Pimco Rae and Pimco Stocksplus
Assuming the 90 days horizon Pimco Rae is expected to generate 12.92 times less return on investment than Pimco Stocksplus. But when comparing it to its historical volatility, Pimco Rae Plus is 1.22 times less risky than Pimco Stocksplus. It trades about 0.01 of its potential returns per unit of risk. Pimco Stocksplus Short is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 705.00 in Pimco Stocksplus Short on December 28, 2024 and sell it today you would earn a total of 59.00 from holding Pimco Stocksplus Short or generate 8.37% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Pimco Rae Plus vs. Pimco Stocksplus Short
Performance |
Timeline |
Pimco Rae Plus |
Pimco Stocksplus Short |
Pimco Rae and Pimco Stocksplus Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Pimco Rae and Pimco Stocksplus
The main advantage of trading using opposite Pimco Rae and Pimco Stocksplus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco Rae position performs unexpectedly, Pimco Stocksplus 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 Pimco Stocksplus will offset losses from the drop in Pimco Stocksplus' long position.Pimco Rae vs. Alpine High Yield | Pimco Rae vs. Aqr Risk Parity | Pimco Rae vs. Transamerica High Yield | Pimco Rae vs. Pace High Yield |
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Check out your portfolio center.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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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