Correlation Between RBC Vision and PIMCO Tactical

Can any of the company-specific risk be diversified away by investing in both RBC Vision and PIMCO Tactical 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 RBC Vision and PIMCO Tactical into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between RBC Vision Global and PIMCO Tactical Income, you can compare the effects of market volatilities on RBC Vision and PIMCO Tactical 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 RBC Vision with a short position of PIMCO Tactical. Check out your portfolio center. Please also check ongoing floating volatility patterns of RBC Vision and PIMCO Tactical.

Diversification Opportunities for RBC Vision and PIMCO Tactical

0.24

Correlation Coefficient

RBC Vision  PIMCO Tactical

Modest diversification

The 3 months correlation between RBC and PIMCO is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding RBC Vision Global and PIMCO Tactical Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PIMCO Tactical Income and RBC Vision 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 RBC Vision Global are associated (or correlated) with PIMCO Tactical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PIMCO Tactical Income has no effect on the direction of RBC Vision i.e., RBC Vision and PIMCO Tactical go up and down completely randomly.

Pair Corralation between RBC Vision and PIMCO Tactical

Assuming the 90 days trading horizon RBC Vision Global is expected to under-perform the PIMCO Tactical. In addition to that, RBC Vision is 3.64 times more volatile than PIMCO Tactical Income. It trades about -0.25 of its total potential returns per unit of risk. PIMCO Tactical Income is currently generating about -0.23 per unit of volatility. If you would invest  700.00  in PIMCO Tactical Income on October 6, 2024 and sell it today you would lose (22.00) from holding PIMCO Tactical Income or give up 3.14% of portfolio value over 90 days.

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

RBC Vision Global  vs.  PIMCO Tactical Income

RBC Vision Global

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days RBC Vision Global has generated negative risk-adjusted returns adding no value to fund investors. Despite somewhat strong technical and fundamental indicators, RBC Vision is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

PIMCO Tactical Income

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PIMCO Tactical Income has generated negative risk-adjusted returns adding no value to fund investors. Despite somewhat strong forward indicators, PIMCO Tactical is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with RBC Vision and PIMCO Tactical

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

The idea behind RBC Vision Global and PIMCO Tactical 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 Stocks Directory module to find actively traded stocks across global markets.