Correlation Between PIMCO Low and PIMCO Short
Can any of the company-specific risk be diversified away by investing in both PIMCO Low and PIMCO Short 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 Low and PIMCO Short into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PIMCO Low Duration and PIMCO Short Term High, you can compare the effects of market volatilities on PIMCO Low and PIMCO Short 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 Low with a short position of PIMCO Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of PIMCO Low and PIMCO Short.
Diversification Opportunities for PIMCO Low and PIMCO Short
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between PIMCO and PIMCO is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding PIMCO Low Duration and PIMCO Short Term High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PIMCO Short Term and PIMCO Low 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 Low Duration are associated (or correlated) with PIMCO Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PIMCO Short Term has no effect on the direction of PIMCO Low i.e., PIMCO Low and PIMCO Short go up and down completely randomly.
Pair Corralation between PIMCO Low and PIMCO Short
Assuming the 90 days trading horizon PIMCO Low is expected to generate 241.13 times less return on investment than PIMCO Short. But when comparing it to its historical volatility, PIMCO Low Duration is 159.2 times less risky than PIMCO Short. It trades about 0.16 of its potential returns per unit of risk. PIMCO Short Term High is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 386.00 in PIMCO Short Term High on October 23, 2024 and sell it today you would earn a total of 511.00 from holding PIMCO Short Term High or generate 132.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PIMCO Low Duration vs. PIMCO Short Term High
Performance |
| Timeline |
| PIMCO Low Duration |
| PIMCO Short Term |
PIMCO Low and PIMCO Short Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PIMCO Low and PIMCO Short
The main advantage of trading using opposite PIMCO Low and PIMCO Short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PIMCO Low position performs unexpectedly, PIMCO Short 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 Short will offset losses from the drop in PIMCO Short's long position.| PIMCO Low vs. PIMCO Dollar Short | PIMCO Low vs. PIMCO ETFs plc | PIMCO Low vs. PIMCO Short Term High | PIMCO Low vs. PIMCO Emerging Markets |
| PIMCO Short vs. PIMCO Dollar Short | PIMCO Short vs. PIMCO Low Duration | PIMCO Short vs. PIMCO ETFs plc | PIMCO Short vs. PIMCO Emerging Markets |
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 Valuation module to check real value of public entities based on technical and fundamental data.
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