Correlation Between PIMCO 15 and IShares ETF
Can any of the company-specific risk be diversified away by investing in both PIMCO 15 and IShares ETF 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 15 and IShares ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PIMCO 15 Year and iShares ETF Trust, you can compare the effects of market volatilities on PIMCO 15 and IShares ETF 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 15 with a short position of IShares ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of PIMCO 15 and IShares ETF.
Diversification Opportunities for PIMCO 15 and IShares ETF
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between PIMCO and IShares is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding PIMCO 15 Year and iShares ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares ETF Trust and PIMCO 15 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 15 Year are associated (or correlated) with IShares ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares ETF Trust has no effect on the direction of PIMCO 15 i.e., PIMCO 15 and IShares ETF go up and down completely randomly.
Pair Corralation between PIMCO 15 and IShares ETF
Given the investment horizon of 90 days PIMCO 15 is expected to generate 1.17 times less return on investment than IShares ETF. In addition to that, PIMCO 15 is 3.28 times more volatile than iShares ETF Trust. It trades about 0.04 of its total potential returns per unit of risk. iShares ETF Trust is currently generating about 0.16 per unit of volatility. If you would invest 2,455 in iShares ETF Trust on September 1, 2024 and sell it today you would earn a total of 23.00 from holding iShares ETF Trust or generate 0.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
PIMCO 15 Year vs. iShares ETF Trust
Performance |
| Timeline |
| PIMCO 15 Year |
| iShares ETF Trust |
PIMCO 15 and IShares ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PIMCO 15 and IShares ETF
The main advantage of trading using opposite PIMCO 15 and IShares ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PIMCO 15 position performs unexpectedly, IShares ETF 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 IShares ETF will offset losses from the drop in IShares ETF's long position.| PIMCO 15 vs. Dimensional ETF Trust | PIMCO 15 vs. JPMorgan Inflation Managed | PIMCO 15 vs. Goldman Sachs ETF | PIMCO 15 vs. Dimensional ETF Trust |
| IShares ETF vs. Dimensional ETF Trust | IShares ETF vs. JPMorgan Inflation Managed | IShares ETF vs. Goldman Sachs ETF | IShares ETF 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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