Correlation Between PIMCO Enhanced and VanEck China
Can any of the company-specific risk be diversified away by investing in both PIMCO Enhanced and VanEck China 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 VanEck China into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PIMCO Enhanced Short and VanEck China Bond, you can compare the effects of market volatilities on PIMCO Enhanced and VanEck China 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 VanEck China. Check out your portfolio center. Please also check ongoing floating volatility patterns of PIMCO Enhanced and VanEck China.
Diversification Opportunities for PIMCO Enhanced and VanEck China
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between PIMCO and VanEck is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding PIMCO Enhanced Short and VanEck China Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck China Bond 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 Short are associated (or correlated) with VanEck China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck China Bond has no effect on the direction of PIMCO Enhanced i.e., PIMCO Enhanced and VanEck China go up and down completely randomly.
Pair Corralation between PIMCO Enhanced and VanEck China
Given the investment horizon of 90 days PIMCO Enhanced Short is expected to generate 0.11 times more return on investment than VanEck China. However, PIMCO Enhanced Short is 8.84 times less risky than VanEck China. It trades about 0.71 of its potential returns per unit of risk. VanEck China Bond is currently generating about 0.03 per unit of risk. If you would invest 8,951 in PIMCO Enhanced Short on August 27, 2024 and sell it today you would earn a total of 1,111 from holding PIMCO Enhanced Short or generate 12.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PIMCO Enhanced Short vs. VanEck China Bond
Performance |
| Timeline |
| PIMCO Enhanced Short |
| VanEck China Bond |
PIMCO Enhanced and VanEck China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PIMCO Enhanced and VanEck China
The main advantage of trading using opposite PIMCO Enhanced and VanEck China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PIMCO Enhanced position performs unexpectedly, VanEck China 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 VanEck China will offset losses from the drop in VanEck China's long position.| PIMCO Enhanced vs. First Trust Low | PIMCO Enhanced vs. First Trust Senior | PIMCO Enhanced vs. First Trust TCW | PIMCO Enhanced vs. First Trust Tactical |
| VanEck China vs. Vanguard Emerging Markets | VanEck China vs. SPDR FTSE International | VanEck China vs. FT Vest Equity | VanEck China vs. Zillow Group Class |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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