Correlation Between PIMCO Investment and IShares Broad
Can any of the company-specific risk be diversified away by investing in both PIMCO Investment and IShares Broad 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 Broad 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 Broad USD, you can compare the effects of market volatilities on PIMCO Investment and IShares Broad 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 Broad. Check out your portfolio center. Please also check ongoing floating volatility patterns of PIMCO Investment and IShares Broad.
Diversification Opportunities for PIMCO Investment and IShares Broad
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between PIMCO and IShares is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding PIMCO Investment Grade and iShares Broad USD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Broad USD 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 Broad. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Broad USD has no effect on the direction of PIMCO Investment i.e., PIMCO Investment and IShares Broad go up and down completely randomly.
Pair Corralation between PIMCO Investment and IShares Broad
Given the investment horizon of 90 days PIMCO Investment Grade is expected to generate 0.99 times more return on investment than IShares Broad. However, PIMCO Investment Grade is 1.01 times less risky than IShares Broad. It trades about 0.05 of its potential returns per unit of risk. iShares Broad USD is currently generating about 0.05 per unit of risk. If you would invest 8,646 in PIMCO Investment Grade on November 1, 2024 and sell it today you would earn a total of 934.00 from holding PIMCO Investment Grade or generate 10.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
PIMCO Investment Grade vs. iShares Broad USD
Performance |
| Timeline |
| PIMCO Investment Grade |
| iShares Broad USD |
PIMCO Investment and IShares Broad Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PIMCO Investment and IShares Broad
The main advantage of trading using opposite PIMCO Investment and IShares Broad positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PIMCO Investment position performs unexpectedly, IShares Broad 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 Broad will offset losses from the drop in IShares Broad'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 Broad vs. iShares 5 10 Year | IShares Broad vs. iShares Broad USD | IShares Broad vs. iShares 1 5 Year | IShares Broad vs. iShares 0 5 Year |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
Other Complementary Tools
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world |