Correlation Between PIMCO Enhanced and SPDR SSgA
Can any of the company-specific risk be diversified away by investing in both PIMCO Enhanced and SPDR SSgA 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 SPDR SSgA 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 SPDR SSgA Ultra, you can compare the effects of market volatilities on PIMCO Enhanced and SPDR SSgA 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 SPDR SSgA. Check out your portfolio center. Please also check ongoing floating volatility patterns of PIMCO Enhanced and SPDR SSgA.
Diversification Opportunities for PIMCO Enhanced and SPDR SSgA
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between PIMCO and SPDR is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding PIMCO Enhanced Low and SPDR SSgA Ultra in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR SSgA Ultra 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 SPDR SSgA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR SSgA Ultra has no effect on the direction of PIMCO Enhanced i.e., PIMCO Enhanced and SPDR SSgA go up and down completely randomly.
Pair Corralation between PIMCO Enhanced and SPDR SSgA
Given the investment horizon of 90 days PIMCO Enhanced Low is expected to generate 2.49 times more return on investment than SPDR SSgA. However, PIMCO Enhanced is 2.49 times more volatile than SPDR SSgA Ultra. It trades about 0.32 of its potential returns per unit of risk. SPDR SSgA Ultra is currently generating about 0.39 per unit of risk. If you would invest 9,496 in PIMCO Enhanced Low on November 3, 2024 and sell it today you would earn a total of 67.00 from holding PIMCO Enhanced Low or generate 0.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
PIMCO Enhanced Low vs. SPDR SSgA Ultra
Performance |
| Timeline |
| PIMCO Enhanced Low |
| SPDR SSgA Ultra |
PIMCO Enhanced and SPDR SSgA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PIMCO Enhanced and SPDR SSgA
The main advantage of trading using opposite PIMCO Enhanced and SPDR SSgA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PIMCO Enhanced position performs unexpectedly, SPDR SSgA 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 SPDR SSgA will offset losses from the drop in SPDR SSgA's long position.| PIMCO Enhanced vs. PIMCO Enhanced Short | PIMCO Enhanced vs. SPDR DoubleLine Total | PIMCO Enhanced vs. FlexShares Ready Access | PIMCO Enhanced vs. iShares Ultra Short Term |
| SPDR SSgA vs. SPDR Bloomberg Investment | SPDR SSgA vs. SPDR Bloomberg 1 10 | SPDR SSgA vs. iShares Short Maturity | SPDR SSgA vs. Invesco Ultra Short |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device |