Correlation Between PIMCO Investment and IShares Fixed
Can any of the company-specific risk be diversified away by investing in both PIMCO Investment and IShares Fixed 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 PIMCO Investment and IShares Fixed into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PIMCO Investment Grade and iShares Fixed Income, you can compare the effects of market volatilities on PIMCO Investment and IShares Fixed 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 PIMCO Investment with a short position of IShares Fixed. Check out your portfolio center. Please also check ongoing floating volatility patterns of PIMCO Investment and IShares Fixed.
Diversification Opportunities for PIMCO Investment and IShares Fixed
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between PIMCO and IShares is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding PIMCO Investment Grade and iShares Fixed Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Fixed Income and PIMCO Investment 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 PIMCO Investment Grade are associated (or correlated) with IShares Fixed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Fixed Income has no effect on the direction of PIMCO Investment i.e., PIMCO Investment and IShares Fixed go up and down completely randomly.
Pair Corralation between PIMCO Investment and IShares Fixed
Given the investment horizon of 90 days PIMCO Investment Grade is expected to generate 2.0 times more return on investment than IShares Fixed. However, PIMCO Investment is 2.0 times more volatile than iShares Fixed Income. It trades about 0.17 of its potential returns per unit of risk. iShares Fixed Income is currently generating about 0.26 per unit of risk. If you would invest 9,627 in PIMCO Investment Grade on September 1, 2024 and sell it today you would earn a total of 136.00 from holding PIMCO Investment Grade or generate 1.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
PIMCO Investment Grade vs. iShares Fixed Income
Performance |
| Timeline |
| PIMCO Investment Grade |
| iShares Fixed Income |
PIMCO Investment and IShares Fixed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PIMCO Investment and IShares Fixed
The main advantage of trading using opposite PIMCO Investment and IShares Fixed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PIMCO Investment position performs unexpectedly, IShares Fixed 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 IShares Fixed will offset losses from the drop in IShares Fixed's long position.| PIMCO Investment vs. PIMCO 0 5 Year | PIMCO Investment vs. iShares Aaa | PIMCO Investment vs. PIMCO Active Bond | PIMCO Investment vs. Invesco Fundamental High |
| IShares Fixed vs. New Pacific Metals | IShares Fixed vs. Precision Optics, | IShares Fixed vs. Terns Pharmaceuticals | IShares Fixed vs. Harmonic |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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