Correlation Between Bondbloxx ETF and Pimco Rae

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

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

Diversification Opportunities for Bondbloxx ETF and Pimco Rae

0.02

Correlation Coefficient

Bondbloxx ETF  Pimco Rae

Significant diversification

The 3 months correlation between Bondbloxx and Pimco is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Bondbloxx ETF Trust 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 Bondbloxx ETF 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 Bondbloxx ETF Trust 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 Bondbloxx ETF i.e., Bondbloxx ETF and Pimco Rae go up and down completely randomly.

Pair Corralation between Bondbloxx ETF and Pimco Rae

Given the investment horizon of 90 days Bondbloxx ETF is expected to generate 3.03 times less return on investment than Pimco Rae. In addition to that, Bondbloxx ETF is 2.98 times more volatile than Pimco Rae Worldwide. It trades about 0.02 of its total potential returns per unit of risk. Pimco Rae Worldwide is currently generating about 0.14 per unit of volatility. If you would invest  819.00  in Pimco Rae Worldwide on September 12, 2024 and sell it today you would earn a total of  9.00  from holding Pimco Rae Worldwide or generate 1.1% return on investment over 90 days.

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

Bondbloxx ETF Trust  vs.  Pimco Rae Worldwide

Bondbloxx ETF Trust

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bondbloxx ETF Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Etf's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the ETF investors.

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 Bondbloxx ETF and Pimco Rae

The main advantage of trading using opposite Bondbloxx ETF and Pimco Rae positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bondbloxx ETF 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 Bondbloxx ETF Trust 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.

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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.