Correlation Between Aim Investment and Pimco Funds
Can any of the company-specific risk be diversified away by investing in both Aim Investment and Pimco Funds 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 Aim Investment and Pimco Funds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aim Investment Secs and Pimco Funds , you can compare the effects of market volatilities on Aim Investment and Pimco Funds 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 Aim Investment with a short position of Pimco Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aim Investment and Pimco Funds.
Diversification Opportunities for Aim Investment and Pimco Funds
1.0 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Aim and PIMCO is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Aim Investment Secs and Pimco Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco Funds and Aim 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 Aim Investment Secs are associated (or correlated) with Pimco Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco Funds has no effect on the direction of Aim Investment i.e., Aim Investment and Pimco Funds go up and down completely randomly.
Pair Corralation between Aim Investment and Pimco Funds
Assuming the 90 days horizon Aim Investment is expected to generate 2.33 times less return on investment than Pimco Funds. But when comparing it to its historical volatility, Aim Investment Secs is 2.37 times less risky than Pimco Funds. It trades about 0.13 of its potential returns per unit of risk. Pimco Funds is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 91.00 in Pimco Funds on September 2, 2024 and sell it today you would earn a total of 9.00 from holding Pimco Funds or generate 9.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aim Investment Secs vs. Pimco Funds
Performance |
| Timeline |
| Aim Investment Secs |
| Pimco Funds |
Aim Investment and Pimco Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aim Investment and Pimco Funds
The main advantage of trading using opposite Aim Investment and Pimco Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aim Investment position performs unexpectedly, Pimco Funds 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 Funds will offset losses from the drop in Pimco Funds' long position.| Aim Investment vs. Vanguard Total Stock | Aim Investment vs. Vanguard 500 Index | Aim Investment vs. Vanguard Total Stock | Aim Investment vs. Vanguard Total Stock |
| Pimco Funds vs. Vanguard Total Stock | Pimco Funds vs. Vanguard 500 Index | Pimco Funds vs. Vanguard Total Stock | Pimco Funds vs. Vanguard Total Stock |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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