Correlation Between Leverage Shares and PIMCO Low
Can any of the company-specific risk be diversified away by investing in both Leverage Shares and PIMCO Low 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 Leverage Shares and PIMCO Low into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Leverage Shares 3x and PIMCO Low Duration, you can compare the effects of market volatilities on Leverage Shares and PIMCO Low 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 Leverage Shares with a short position of PIMCO Low. Check out your portfolio center. Please also check ongoing floating volatility patterns of Leverage Shares and PIMCO Low.
Diversification Opportunities for Leverage Shares and PIMCO Low
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Leverage and PIMCO is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Leverage Shares 3x and PIMCO Low Duration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PIMCO Low Duration and Leverage Shares 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 Leverage Shares 3x are associated (or correlated) with PIMCO Low. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PIMCO Low Duration has no effect on the direction of Leverage Shares i.e., Leverage Shares and PIMCO Low go up and down completely randomly.
Pair Corralation between Leverage Shares and PIMCO Low
Assuming the 90 days trading horizon Leverage Shares 3x is expected to generate 82.45 times more return on investment than PIMCO Low. However, Leverage Shares is 82.45 times more volatile than PIMCO Low Duration. It trades about 0.39 of its potential returns per unit of risk. PIMCO Low Duration is currently generating about 0.18 per unit of risk. If you would invest 1,159,060 in Leverage Shares 3x on September 2, 2024 and sell it today you would earn a total of 2,593,015 from holding Leverage Shares 3x or generate 223.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Leverage Shares 3x vs. PIMCO Low Duration
Performance |
| Timeline |
| Leverage Shares 3x |
| PIMCO Low Duration |
Leverage Shares and PIMCO Low Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Leverage Shares and PIMCO Low
The main advantage of trading using opposite Leverage Shares and PIMCO Low positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Leverage Shares position performs unexpectedly, PIMCO Low 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 Low will offset losses from the drop in PIMCO Low's long position.| Leverage Shares vs. WisdomTree Natural Gas | Leverage Shares vs. WisdomTree Natural Gas | Leverage Shares vs. WisdomTree SP 500 | Leverage Shares vs. WisdomTree Silver 3x |
| PIMCO Low vs. GraniteShares 3x Short | PIMCO Low vs. WisdomTree Natural Gas | PIMCO Low vs. Leverage Shares 3x | PIMCO Low vs. WisdomTree Natural Gas |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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