Correlation Between Abbey Capital and Pimco Trends
Can any of the company-specific risk be diversified away by investing in both Abbey Capital and Pimco Trends 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 Abbey Capital and Pimco Trends into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Abbey Capital Futures and Pimco Trends Managed, you can compare the effects of market volatilities on Abbey Capital and Pimco Trends 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 Abbey Capital with a short position of Pimco Trends. Check out your portfolio center. Please also check ongoing floating volatility patterns of Abbey Capital and Pimco Trends.
Diversification Opportunities for Abbey Capital and Pimco Trends
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Abbey and Pimco is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Abbey Capital Futures and Pimco Trends Managed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco Trends Managed and Abbey Capital 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 Abbey Capital Futures are associated (or correlated) with Pimco Trends. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco Trends Managed has no effect on the direction of Abbey Capital i.e., Abbey Capital and Pimco Trends go up and down completely randomly.
Pair Corralation between Abbey Capital and Pimco Trends
Assuming the 90 days horizon Abbey Capital is expected to generate 47.73 times less return on investment than Pimco Trends. But when comparing it to its historical volatility, Abbey Capital Futures is 1.37 times less risky than Pimco Trends. It trades about 0.0 of its potential returns per unit of risk. Pimco Trends Managed is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 988.00 in Pimco Trends Managed on August 28, 2024 and sell it today you would earn a total of 11.00 from holding Pimco Trends Managed or generate 1.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Abbey Capital Futures vs. Pimco Trends Managed
Performance |
| Timeline |
| Abbey Capital Futures |
| Pimco Trends Managed |
Abbey Capital and Pimco Trends Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Abbey Capital and Pimco Trends
The main advantage of trading using opposite Abbey Capital and Pimco Trends positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Abbey Capital position performs unexpectedly, Pimco Trends 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 Trends will offset losses from the drop in Pimco Trends' long position.| Abbey Capital vs. Abbey Capital Multi | Abbey Capital vs. Vanguard 500 Index | Abbey Capital vs. Vanguard Target Retirement | Abbey Capital vs. Fidelity Balanced Fund |
| Pimco Trends vs. Asg Managed Futures | Pimco Trends vs. Asg Managed Futures | Pimco Trends vs. Aqr Managed Futures | Pimco Trends vs. iMGP DBi Managed |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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