Correlation Between Ab Impact and Pimco Long
Can any of the company-specific risk be diversified away by investing in both Ab Impact and Pimco Long 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 Ab Impact and Pimco Long into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab Impact Municipal and Pimco Long Term Credit, you can compare the effects of market volatilities on Ab Impact and Pimco Long 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 Ab Impact with a short position of Pimco Long. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Impact and Pimco Long.
Diversification Opportunities for Ab Impact and Pimco Long
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between ABIMX and Pimco is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Ab Impact Municipal and Pimco Long Term Credit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco Long Term and Ab Impact 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 Ab Impact Municipal are associated (or correlated) with Pimco Long. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco Long Term has no effect on the direction of Ab Impact i.e., Ab Impact and Pimco Long go up and down completely randomly.
Pair Corralation between Ab Impact and Pimco Long
Assuming the 90 days horizon Ab Impact Municipal is expected to generate 0.67 times more return on investment than Pimco Long. However, Ab Impact Municipal is 1.5 times less risky than Pimco Long. It trades about -0.36 of its potential returns per unit of risk. Pimco Long Term Credit is currently generating about -0.6 per unit of risk. If you would invest 1,001 in Ab Impact Municipal on October 9, 2024 and sell it today you would lose (23.00) from holding Ab Impact Municipal or give up 2.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ab Impact Municipal vs. Pimco Long Term Credit
Performance |
| Timeline |
| Ab Impact Municipal |
| Pimco Long Term |
Ab Impact and Pimco Long Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Impact and Pimco Long
The main advantage of trading using opposite Ab Impact and Pimco Long positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Impact position performs unexpectedly, Pimco Long 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 Long will offset losses from the drop in Pimco Long's long position.| Ab Impact vs. Dws Government Money | Ab Impact vs. Franklin Government Money | Ab Impact vs. Money Market Obligations | Ab Impact vs. Edward Jones Money |
| Pimco Long vs. Arrow Managed Futures | Pimco Long vs. Aqr Managed Futures | Pimco Long vs. Atac Inflation Rotation | Pimco Long vs. Cref Inflation Linked Bond |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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