Correlation Between Sycamore Entmt and Pimco Rae

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

By analyzing existing cross correlation between Sycamore Entmt Grp and Pimco Rae Worldwide, you can compare the effects of market volatilities on Sycamore Entmt and Pimco Rae 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 Sycamore Entmt with a short position of Pimco Rae. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sycamore Entmt and Pimco Rae.

Diversification Opportunities for Sycamore Entmt and Pimco Rae

-0.06

Correlation Coefficient

Sycamore Entmt  Pimco Rae

Good diversification

The 3 months correlation between Sycamore and Pimco is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Sycamore Entmt Grp and Pimco Rae Worldwide in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco Rae Worldwide and Sycamore Entmt 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 Sycamore Entmt Grp are associated (or correlated) with Pimco Rae. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco Rae Worldwide has no effect on the direction of Sycamore Entmt i.e., Sycamore Entmt and Pimco Rae go up and down completely randomly.

Pair Corralation between Sycamore Entmt and Pimco Rae

Given the investment horizon of 90 days Sycamore Entmt Grp is expected to generate 40.73 times more return on investment than Pimco Rae. However, Sycamore Entmt is 40.73 times more volatile than Pimco Rae Worldwide. It trades about 0.18 of its potential returns per unit of risk. Pimco Rae Worldwide is currently generating about 0.09 per unit of risk. If you would invest  0.06  in Sycamore Entmt Grp on September 12, 2024 and sell it today you would earn a total of  0.11  from holding Sycamore Entmt Grp or generate 183.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

Sycamore Entmt Grp  vs.  Pimco Rae Worldwide

Sycamore Entmt Grp

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Sycamore Entmt Grp are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating technical and fundamental indicators, Sycamore Entmt demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pimco Rae Worldwide

Risk-Adjusted Performance

6 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Pimco Rae Worldwide are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong primary indicators, Pimco Rae is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Sycamore Entmt and Pimco Rae

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

The idea behind Sycamore Entmt Grp and Pimco Rae Worldwide 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.