Correlation Between Pimco New and Cornerstone Strategic

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

Diversification Opportunities for Pimco New and Cornerstone Strategic

-0.17

Correlation Coefficient

Pimco New  Cornerstone Strategic

Good diversification

The 3 months correlation between Pimco and Cornerstone is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Pimco New York and Cornerstone Strategic Return in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cornerstone Strategic 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 Cornerstone Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cornerstone Strategic has no effect on the direction of Pimco New i.e., Pimco New and Cornerstone Strategic go up and down completely randomly.

Pair Corralation between Pimco New and Cornerstone Strategic

Considering the 90-day investment horizon Pimco New York is expected to generate 0.3 times more return on investment than Cornerstone Strategic. However, Pimco New York is 3.3 times less risky than Cornerstone Strategic. It trades about 0.02 of its potential returns per unit of risk. Cornerstone Strategic Return is currently generating about -0.11 per unit of risk. If you would invest  558.00  in Pimco New York on December 29, 2024 and sell it today you would earn a total of  3.00  from holding Pimco New York or generate 0.54% return on investment over 90 days.

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

Pimco New York  vs.  Cornerstone Strategic Return

Pimco New York

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Pimco New York are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of very healthy basic indicators, Pimco New is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Cornerstone Strategic

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cornerstone Strategic Return has generated negative risk-adjusted returns adding no value to fund investors. Despite unfluctuating performance in the last few months, the Fund's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the mutual fund stockholders.

Pair Trading with Pimco New and Cornerstone Strategic

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

The idea behind Pimco New York and Cornerstone Strategic Return 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.