Correlation Between Dow Jones and PIMCO Access
Can any of the company-specific risk be diversified away by investing in both Dow Jones and PIMCO Access 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 Dow Jones and PIMCO Access into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dow Jones Industrial and PIMCO Access Income, you can compare the effects of market volatilities on Dow Jones and PIMCO Access 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 Dow Jones with a short position of PIMCO Access. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and PIMCO Access.
Diversification Opportunities for Dow Jones and PIMCO Access
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dow and PIMCO is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and PIMCO Access Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PIMCO Access Income and Dow Jones 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 Dow Jones Industrial are associated (or correlated) with PIMCO Access. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PIMCO Access Income has no effect on the direction of Dow Jones i.e., Dow Jones and PIMCO Access go up and down completely randomly.
Pair Corralation between Dow Jones and PIMCO Access
Assuming the 90 days trading horizon Dow Jones is expected to generate 1.11 times less return on investment than PIMCO Access. But when comparing it to its historical volatility, Dow Jones Industrial is 1.31 times less risky than PIMCO Access. It trades about 0.09 of its potential returns per unit of risk. PIMCO Access Income is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,225 in PIMCO Access Income on August 31, 2024 and sell it today you would earn a total of 459.00 from holding PIMCO Access Income or generate 37.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Dow Jones Industrial vs. PIMCO Access Income
Performance |
| Timeline |
Dow Jones and PIMCO Access Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
PIMCO Access Income
Pair trading matchups for PIMCO Access
Pair Trading with Dow Jones and PIMCO Access
The main advantage of trading using opposite Dow Jones and PIMCO Access positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, PIMCO Access 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 Access will offset losses from the drop in PIMCO Access' long position.| Dow Jones vs. Aerofoam Metals | Dow Jones vs. ACG Metals Limited | Dow Jones vs. China Clean Energy | Dow Jones vs. Fast Retailing Co |
| PIMCO Access vs. Pimco Dynamic Income | PIMCO Access vs. Pimco Corporate Income | PIMCO Access vs. Doubleline Yield Opportunities | PIMCO Access vs. Cohen Steers Reit |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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