Correlation Between PIMCO Enhanced and Capital Group
Can any of the company-specific risk be diversified away by investing in both PIMCO Enhanced and Capital Group 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 Enhanced and Capital Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PIMCO Enhanced Low and Capital Group Short, you can compare the effects of market volatilities on PIMCO Enhanced and Capital Group 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 Enhanced with a short position of Capital Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of PIMCO Enhanced and Capital Group.
Diversification Opportunities for PIMCO Enhanced and Capital Group
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between PIMCO and Capital is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding PIMCO Enhanced Low and Capital Group Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capital Group Short and PIMCO Enhanced 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 Enhanced Low are associated (or correlated) with Capital Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capital Group Short has no effect on the direction of PIMCO Enhanced i.e., PIMCO Enhanced and Capital Group go up and down completely randomly.
Pair Corralation between PIMCO Enhanced and Capital Group
Given the investment horizon of 90 days PIMCO Enhanced Low is expected to generate 0.94 times more return on investment than Capital Group. However, PIMCO Enhanced Low is 1.06 times less risky than Capital Group. It trades about 0.2 of its potential returns per unit of risk. Capital Group Short is currently generating about 0.18 per unit of risk. If you would invest 8,919 in PIMCO Enhanced Low on August 24, 2024 and sell it today you would earn a total of 599.00 from holding PIMCO Enhanced Low or generate 6.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.6% |
| Values | Daily Returns |
PIMCO Enhanced Low vs. Capital Group Short
Performance |
| Timeline |
| PIMCO Enhanced Low |
| Capital Group Short |
PIMCO Enhanced and Capital Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PIMCO Enhanced and Capital Group
The main advantage of trading using opposite PIMCO Enhanced and Capital Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PIMCO Enhanced position performs unexpectedly, Capital Group 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 Capital Group will offset losses from the drop in Capital Group's long position.| PIMCO Enhanced vs. Dimensional ETF Trust | PIMCO Enhanced vs. Dimensional ETF Trust | PIMCO Enhanced vs. Dimensional Core Equity | PIMCO Enhanced vs. Dimensional ETF Trust |
| Capital Group vs. Dimensional ETF Trust | Capital Group vs. Dimensional ETF Trust | Capital Group vs. Dimensional Core Equity | Capital Group vs. Dimensional ETF Trust |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
Other Complementary Tools
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Equity Valuation Check real value of public entities based on technical and fundamental data |