Correlation Between PIMCO Euro and Vanguard FTSE
Can any of the company-specific risk be diversified away by investing in both PIMCO Euro and Vanguard FTSE 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 Euro and Vanguard FTSE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PIMCO Euro Short Term and Vanguard FTSE Developed, you can compare the effects of market volatilities on PIMCO Euro and Vanguard FTSE 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 Euro with a short position of Vanguard FTSE. Check out your portfolio center. Please also check ongoing floating volatility patterns of PIMCO Euro and Vanguard FTSE.
Diversification Opportunities for PIMCO Euro and Vanguard FTSE
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between PIMCO and Vanguard is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding PIMCO Euro Short Term and Vanguard FTSE Developed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard FTSE Developed and PIMCO Euro 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 Euro Short Term are associated (or correlated) with Vanguard FTSE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard FTSE Developed has no effect on the direction of PIMCO Euro i.e., PIMCO Euro and Vanguard FTSE go up and down completely randomly.
Pair Corralation between PIMCO Euro and Vanguard FTSE
Assuming the 90 days trading horizon PIMCO Euro Short Term is expected to generate 0.2 times more return on investment than Vanguard FTSE. However, PIMCO Euro Short Term is 5.06 times less risky than Vanguard FTSE. It trades about 0.13 of its potential returns per unit of risk. Vanguard FTSE Developed is currently generating about 0.0 per unit of risk. If you would invest 1,020 in PIMCO Euro Short Term on October 21, 2024 and sell it today you would earn a total of 143.00 from holding PIMCO Euro Short Term or generate 14.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
PIMCO Euro Short Term vs. Vanguard FTSE Developed
Performance |
| Timeline |
| PIMCO Euro Short |
| Vanguard FTSE Developed |
PIMCO Euro and Vanguard FTSE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PIMCO Euro and Vanguard FTSE
The main advantage of trading using opposite PIMCO Euro and Vanguard FTSE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PIMCO Euro position performs unexpectedly, Vanguard FTSE 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 Vanguard FTSE will offset losses from the drop in Vanguard FTSE's long position.| PIMCO Euro vs. UBSFund Solutions MSCI | PIMCO Euro vs. Vanguard SP 500 | PIMCO Euro vs. iShares Core SP | PIMCO Euro vs. Lyxor Japan UCITS |
| Vanguard FTSE vs. UBSFund Solutions MSCI | Vanguard FTSE vs. Vanguard SP 500 | Vanguard FTSE vs. iShares Core SP | Vanguard FTSE vs. Lyxor Japan UCITS |
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 CEOs Directory module to screen CEOs from public companies around the world.
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