Correlation Between PIMCO 15 and FlexShares IBoxx
Can any of the company-specific risk be diversified away by investing in both PIMCO 15 and FlexShares IBoxx 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 FlexShares IBoxx 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 FlexShares iBoxx 3 Year, you can compare the effects of market volatilities on PIMCO 15 and FlexShares IBoxx 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 FlexShares IBoxx. Check out your portfolio center. Please also check ongoing floating volatility patterns of PIMCO 15 and FlexShares IBoxx.
Diversification Opportunities for PIMCO 15 and FlexShares IBoxx
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between PIMCO and FlexShares is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding PIMCO 15 Year and FlexShares iBoxx 3 Year in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FlexShares iBoxx 3 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 FlexShares IBoxx. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FlexShares iBoxx 3 has no effect on the direction of PIMCO 15 i.e., PIMCO 15 and FlexShares IBoxx go up and down completely randomly.
Pair Corralation between PIMCO 15 and FlexShares IBoxx
Given the investment horizon of 90 days PIMCO 15 Year is expected to generate 4.55 times more return on investment than FlexShares IBoxx. However, PIMCO 15 is 4.55 times more volatile than FlexShares iBoxx 3 Year. It trades about 0.19 of its potential returns per unit of risk. FlexShares iBoxx 3 Year is currently generating about 0.34 per unit of risk. If you would invest 5,207 in PIMCO 15 Year on November 2, 2024 and sell it today you would earn a total of 112.00 from holding PIMCO 15 Year or generate 2.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PIMCO 15 Year vs. FlexShares iBoxx 3 Year
Performance |
| Timeline |
| PIMCO 15 Year |
| FlexShares iBoxx 3 |
PIMCO 15 and FlexShares IBoxx Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PIMCO 15 and FlexShares IBoxx
The main advantage of trading using opposite PIMCO 15 and FlexShares IBoxx positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PIMCO 15 position performs unexpectedly, FlexShares IBoxx 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 FlexShares IBoxx will offset losses from the drop in FlexShares IBoxx'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 |
| FlexShares IBoxx vs. FlexShares iBoxx 5 Year | FlexShares IBoxx vs. SPDR Bloomberg 1 10 | FlexShares IBoxx vs. PIMCO 1 5 Year | FlexShares IBoxx vs. PIMCO Broad TIPS |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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