Correlation Between Blue Ribbon and PIMCO Global

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

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

Diversification Opportunities for Blue Ribbon and PIMCO Global

-0.49

Correlation Coefficient

Blue Ribbon  PIMCO Global

Very good diversification

The 3 months correlation between Blue and PIMCO is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Blue Ribbon Income and PIMCO Global Incme in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PIMCO Global Incme and Blue Ribbon 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 Blue Ribbon Income are associated (or correlated) with PIMCO Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PIMCO Global Incme has no effect on the direction of Blue Ribbon i.e., Blue Ribbon and PIMCO Global go up and down completely randomly.

Pair Corralation between Blue Ribbon and PIMCO Global

Assuming the 90 days trading horizon Blue Ribbon Income is expected to under-perform the PIMCO Global. In addition to that, Blue Ribbon is 2.37 times more volatile than PIMCO Global Incme. It trades about -0.12 of its total potential returns per unit of risk. PIMCO Global Incme is currently generating about 0.09 per unit of volatility. If you would invest  721.00  in PIMCO Global Incme on December 30, 2024 and sell it today you would earn a total of  23.00  from holding PIMCO Global Incme or generate 3.19% return on investment over 90 days.

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

Blue Ribbon Income  vs.  PIMCO Global Incme

Blue Ribbon Income

Risk-Adjusted Performance

Very Weak

Over the last 90 days Blue Ribbon Income has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

PIMCO Global Incme

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in PIMCO Global Incme are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat strong forward indicators, PIMCO Global is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Blue Ribbon and PIMCO Global

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

The idea behind Blue Ribbon Income and PIMCO Global Incme 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.