Correlation Between PIMCO 15 and WisdomTree Emerging
Can any of the company-specific risk be diversified away by investing in both PIMCO 15 and WisdomTree Emerging 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 WisdomTree Emerging 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 WisdomTree Emerging Markets, you can compare the effects of market volatilities on PIMCO 15 and WisdomTree Emerging 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 WisdomTree Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of PIMCO 15 and WisdomTree Emerging.
Diversification Opportunities for PIMCO 15 and WisdomTree Emerging
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between PIMCO and WisdomTree is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding PIMCO 15 Year and WisdomTree Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree Emerging 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 WisdomTree Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree Emerging has no effect on the direction of PIMCO 15 i.e., PIMCO 15 and WisdomTree Emerging go up and down completely randomly.
Pair Corralation between PIMCO 15 and WisdomTree Emerging
Given the investment horizon of 90 days PIMCO 15 Year is expected to under-perform the WisdomTree Emerging. In addition to that, PIMCO 15 is 1.42 times more volatile than WisdomTree Emerging Markets. It trades about -0.01 of its total potential returns per unit of risk. WisdomTree Emerging Markets is currently generating about 0.03 per unit of volatility. If you would invest 2,439 in WisdomTree Emerging Markets on August 27, 2024 and sell it today you would earn a total of 188.00 from holding WisdomTree Emerging Markets or generate 7.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
PIMCO 15 Year vs. WisdomTree Emerging Markets
Performance |
| Timeline |
| PIMCO 15 Year |
| WisdomTree Emerging |
PIMCO 15 and WisdomTree Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PIMCO 15 and WisdomTree Emerging
The main advantage of trading using opposite PIMCO 15 and WisdomTree Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PIMCO 15 position performs unexpectedly, WisdomTree Emerging 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 WisdomTree Emerging will offset losses from the drop in WisdomTree Emerging's long position.| PIMCO 15 vs. VanEck JP Morgan | PIMCO 15 vs. Vanguard Extended Duration | PIMCO 15 vs. PIMCO 1 5 Year | PIMCO 15 vs. PIMCO Broad TIPS |
| WisdomTree Emerging vs. Invesco Emerging Markets | WisdomTree Emerging vs. PIMCO 15 Year | WisdomTree Emerging vs. iShares JP Morgan |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
Other Complementary Tools
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance |