Correlation Between PIMCO ETF and PIMCO Intermediate
Can any of the company-specific risk be diversified away by investing in both PIMCO ETF and PIMCO Intermediate 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 ETF and PIMCO Intermediate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PIMCO ETF Trust and PIMCO Intermediate Municipal, you can compare the effects of market volatilities on PIMCO ETF and PIMCO Intermediate 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 ETF with a short position of PIMCO Intermediate. Check out your portfolio center. Please also check ongoing floating volatility patterns of PIMCO ETF and PIMCO Intermediate.
Diversification Opportunities for PIMCO ETF and PIMCO Intermediate
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between PIMCO and PIMCO is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding PIMCO ETF Trust and PIMCO Intermediate Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PIMCO Intermediate and PIMCO ETF 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 ETF Trust are associated (or correlated) with PIMCO Intermediate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PIMCO Intermediate has no effect on the direction of PIMCO ETF i.e., PIMCO ETF and PIMCO Intermediate go up and down completely randomly.
Pair Corralation between PIMCO ETF and PIMCO Intermediate
Given the investment horizon of 90 days PIMCO ETF Trust is expected to under-perform the PIMCO Intermediate. In addition to that, PIMCO ETF is 1.23 times more volatile than PIMCO Intermediate Municipal. It trades about -0.01 of its total potential returns per unit of risk. PIMCO Intermediate Municipal is currently generating about 0.01 per unit of volatility. If you would invest 5,164 in PIMCO Intermediate Municipal on October 26, 2024 and sell it today you would earn a total of 8.00 from holding PIMCO Intermediate Municipal or generate 0.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
PIMCO ETF Trust vs. PIMCO Intermediate Municipal
Performance |
| Timeline |
| PIMCO ETF Trust |
| PIMCO Intermediate |
PIMCO ETF and PIMCO Intermediate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PIMCO ETF and PIMCO Intermediate
The main advantage of trading using opposite PIMCO ETF and PIMCO Intermediate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PIMCO ETF position performs unexpectedly, PIMCO Intermediate 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 PIMCO Intermediate will offset losses from the drop in PIMCO Intermediate's long position.| PIMCO ETF vs. BlackRock Intermediate Muni | PIMCO ETF vs. IQ MacKay Municipal | PIMCO ETF vs. PIMCO Short Term | PIMCO ETF vs. iShares Short Maturity |
| PIMCO Intermediate vs. PIMCO Short Term | PIMCO Intermediate vs. VanEck Intermediate Muni | PIMCO Intermediate vs. VanEck Long Muni | PIMCO Intermediate vs. VanEck Short Muni |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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