Correlation Between Ab Bond and Pimco Energy
Can any of the company-specific risk be diversified away by investing in both Ab Bond and Pimco Energy 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 Bond and Pimco Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab Bond Inflation and Pimco Energy Tactical, you can compare the effects of market volatilities on Ab Bond and Pimco Energy 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 Bond with a short position of Pimco Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Bond and Pimco Energy.
Diversification Opportunities for Ab Bond and Pimco Energy
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ABNCX and Pimco is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Ab Bond Inflation and Pimco Energy Tactical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco Energy Tactical and Ab Bond 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 Bond Inflation are associated (or correlated) with Pimco Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco Energy Tactical has no effect on the direction of Ab Bond i.e., Ab Bond and Pimco Energy go up and down completely randomly.
Pair Corralation between Ab Bond and Pimco Energy
Assuming the 90 days horizon Ab Bond Inflation is expected to under-perform the Pimco Energy. But the mutual fund apears to be less risky and, when comparing its historical volatility, Ab Bond Inflation is 9.4 times less risky than Pimco Energy. The mutual fund trades about -0.25 of its potential returns per unit of risk. The Pimco Energy Tactical is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 2,627 in Pimco Energy Tactical on October 10, 2024 and sell it today you would lose (32.00) from holding Pimco Energy Tactical or give up 1.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ab Bond Inflation vs. Pimco Energy Tactical
Performance |
| Timeline |
| Ab Bond Inflation |
| Pimco Energy Tactical |
Ab Bond and Pimco Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Bond and Pimco Energy
The main advantage of trading using opposite Ab Bond and Pimco Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Bond position performs unexpectedly, Pimco Energy 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 Energy will offset losses from the drop in Pimco Energy's long position.| Ab Bond vs. Glg Intl Small | Ab Bond vs. Kinetics Small Cap | Ab Bond vs. Tax Managed Mid Small | Ab Bond vs. Hunter Small Cap |
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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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