Correlation Between Absolute Convertible and Pimco All
Can any of the company-specific risk be diversified away by investing in both Absolute Convertible and Pimco All 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 Absolute Convertible and Pimco All into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Absolute Convertible Arbitrage and Pimco All Asset, you can compare the effects of market volatilities on Absolute Convertible and Pimco All 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 Absolute Convertible with a short position of Pimco All. Check out your portfolio center. Please also check ongoing floating volatility patterns of Absolute Convertible and Pimco All.
Diversification Opportunities for Absolute Convertible and Pimco All
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Absolute and Pimco is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Absolute Convertible Arbitrage and Pimco All Asset in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco All Asset and Absolute Convertible 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 Absolute Convertible Arbitrage are associated (or correlated) with Pimco All. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco All Asset has no effect on the direction of Absolute Convertible i.e., Absolute Convertible and Pimco All go up and down completely randomly.
Pair Corralation between Absolute Convertible and Pimco All
Assuming the 90 days horizon Absolute Convertible Arbitrage is expected to generate 0.14 times more return on investment than Pimco All. However, Absolute Convertible Arbitrage is 6.91 times less risky than Pimco All. It trades about 0.54 of its potential returns per unit of risk. Pimco All Asset is currently generating about 0.05 per unit of risk. If you would invest 1,070 in Absolute Convertible Arbitrage on September 14, 2024 and sell it today you would earn a total of 81.00 from holding Absolute Convertible Arbitrage or generate 7.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Absolute Convertible Arbitrage vs. Pimco All Asset
Performance |
| Timeline |
| Absolute Convertible |
| Pimco All Asset |
Absolute Convertible and Pimco All Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Absolute Convertible and Pimco All
The main advantage of trading using opposite Absolute Convertible and Pimco All positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Absolute Convertible position performs unexpectedly, Pimco All 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 All will offset losses from the drop in Pimco All's long position.| Absolute Convertible vs. Allianzgi Convertible Income | Absolute Convertible vs. Lord Abbett Convertible | Absolute Convertible vs. Rationalpier 88 Convertible | Absolute Convertible vs. Virtus Convertible |
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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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