Correlation Between IShares Core and PIMCO Investment
Can any of the company-specific risk be diversified away by investing in both IShares Core and PIMCO Investment 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 Core and PIMCO Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Core SP and PIMCO Investment Grade, you can compare the effects of market volatilities on IShares Core and PIMCO Investment 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 Core with a short position of PIMCO Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Core and PIMCO Investment.
Diversification Opportunities for IShares Core and PIMCO Investment
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between IShares and PIMCO is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding iShares Core SP and PIMCO Investment Grade in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PIMCO Investment Grade and IShares Core 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 Core SP are associated (or correlated) with PIMCO Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PIMCO Investment Grade has no effect on the direction of IShares Core i.e., IShares Core and PIMCO Investment go up and down completely randomly.
Pair Corralation between IShares Core and PIMCO Investment
Considering the 90-day investment horizon iShares Core SP is expected to generate 2.26 times more return on investment than PIMCO Investment. However, IShares Core is 2.26 times more volatile than PIMCO Investment Grade. It trades about 0.2 of its potential returns per unit of risk. PIMCO Investment Grade is currently generating about 0.02 per unit of risk. If you would invest 55,311 in iShares Core SP on September 3, 2024 and sell it today you would earn a total of 5,196 from holding iShares Core SP or generate 9.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Core SP vs. PIMCO Investment Grade
Performance |
| Timeline |
| iShares Core SP |
| PIMCO Investment Grade |
IShares Core and PIMCO Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Core and PIMCO Investment
The main advantage of trading using opposite IShares Core and PIMCO Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Core position performs unexpectedly, PIMCO Investment 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 Investment will offset losses from the drop in PIMCO Investment's long position.| IShares Core vs. iShares Core SP | IShares Core vs. iShares Core SP | IShares Core vs. iShares SP 500 | IShares Core vs. iShares Russell 2000 |
| PIMCO Investment vs. PIMCO 0 5 Year | PIMCO Investment vs. iShares Aaa | PIMCO Investment vs. PIMCO Active Bond | PIMCO Investment vs. Invesco Fundamental High |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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