Correlation Between IShares JP and PIMCO Euro
Can any of the company-specific risk be diversified away by investing in both IShares JP and PIMCO Euro 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 IShares JP and PIMCO Euro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares JP Morgan and PIMCO Euro Short, you can compare the effects of market volatilities on IShares JP and PIMCO Euro 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 IShares JP with a short position of PIMCO Euro. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares JP and PIMCO Euro.
Diversification Opportunities for IShares JP and PIMCO Euro
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between IShares and PIMCO is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding iShares JP Morgan and PIMCO Euro Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PIMCO Euro Short and IShares JP 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 iShares JP Morgan are associated (or correlated) with PIMCO Euro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PIMCO Euro Short has no effect on the direction of IShares JP i.e., IShares JP and PIMCO Euro go up and down completely randomly.
Pair Corralation between IShares JP and PIMCO Euro
Assuming the 90 days trading horizon iShares JP Morgan is expected to generate 9.93 times more return on investment than PIMCO Euro. However, IShares JP is 9.93 times more volatile than PIMCO Euro Short. It trades about 0.26 of its potential returns per unit of risk. PIMCO Euro Short is currently generating about 0.59 per unit of risk. If you would invest 8,875 in iShares JP Morgan on September 13, 2024 and sell it today you would earn a total of 128.00 from holding iShares JP Morgan or generate 1.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares JP Morgan vs. PIMCO Euro Short
Performance |
| Timeline |
| iShares JP Morgan |
| PIMCO Euro Short |
IShares JP and PIMCO Euro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares JP and PIMCO Euro
The main advantage of trading using opposite IShares JP and PIMCO Euro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares JP position performs unexpectedly, PIMCO Euro 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 Euro will offset losses from the drop in PIMCO Euro's long position.| IShares JP vs. iShares Corp Bond | IShares JP vs. iShares Emerging Asia | IShares JP vs. iShares MSCI Global | IShares JP vs. iShares VII PLC |
| PIMCO Euro vs. PIMCO Short Term High | PIMCO Euro vs. PIMCO Short Term High | PIMCO Euro vs. PIMCO Euro Short Term | PIMCO Euro vs. PIMCO Low Duration |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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