Correlation Between Chestnut Street and Pimco Trends
Can any of the company-specific risk be diversified away by investing in both Chestnut Street 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 Chestnut Street and Pimco Trends into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chestnut Street Exchange and Pimco Trends Managed, you can compare the effects of market volatilities on Chestnut Street 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 Chestnut Street with a short position of Pimco Trends. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chestnut Street and Pimco Trends.
Diversification Opportunities for Chestnut Street and Pimco Trends
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Chestnut and Pimco is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Chestnut Street Exchange 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 Chestnut Street 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 Chestnut Street Exchange 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 Chestnut Street i.e., Chestnut Street and Pimco Trends go up and down completely randomly.
Pair Corralation between Chestnut Street and Pimco Trends
Assuming the 90 days horizon Chestnut Street Exchange is expected to generate 1.21 times more return on investment than Pimco Trends. However, Chestnut Street is 1.21 times more volatile than Pimco Trends Managed. It trades about 0.2 of its potential returns per unit of risk. Pimco Trends Managed is currently generating about 0.14 per unit of risk. If you would invest 113,531 in Chestnut Street Exchange on August 27, 2024 and sell it today you would earn a total of 3,968 from holding Chestnut Street Exchange or generate 3.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chestnut Street Exchange vs. Pimco Trends Managed
Performance |
| Timeline |
| Chestnut Street Exchange |
| Pimco Trends Managed |
Chestnut Street and Pimco Trends Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chestnut Street and Pimco Trends
The main advantage of trading using opposite Chestnut Street and Pimco Trends positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chestnut Street 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.| Chestnut Street vs. Vanguard Total Stock | Chestnut Street vs. Vanguard 500 Index | Chestnut Street vs. Vanguard Total Stock | Chestnut Street vs. Vanguard Total Stock |
| Pimco Trends vs. Fidelity Sai International | Pimco Trends vs. Fidelity Sai Minimum | Pimco Trends vs. Fidelity Sai Treasury | Pimco Trends vs. Fidelity Sai Emerging |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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