Correlation Between PIMCO Enhanced and Dimensional ETF
Can any of the company-specific risk be diversified away by investing in both PIMCO Enhanced and Dimensional 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 Enhanced and Dimensional ETF 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 Dimensional ETF Trust, you can compare the effects of market volatilities on PIMCO Enhanced and Dimensional 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 Enhanced with a short position of Dimensional ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of PIMCO Enhanced and Dimensional ETF.
Diversification Opportunities for PIMCO Enhanced and Dimensional ETF
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between PIMCO and Dimensional is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding PIMCO Enhanced Short and Dimensional ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dimensional ETF Trust 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 Dimensional ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dimensional ETF Trust has no effect on the direction of PIMCO Enhanced i.e., PIMCO Enhanced and Dimensional ETF go up and down completely randomly.
Pair Corralation between PIMCO Enhanced and Dimensional ETF
Given the investment horizon of 90 days PIMCO Enhanced Short is expected to generate 0.97 times more return on investment than Dimensional ETF. However, PIMCO Enhanced Short is 1.03 times less risky than Dimensional ETF. It trades about 0.71 of its potential returns per unit of risk. Dimensional ETF Trust is currently generating about 0.66 per unit of risk. If you would invest 8,955 in PIMCO Enhanced Short on August 26, 2024 and sell it today you would earn a total of 1,107 from holding PIMCO Enhanced Short or generate 12.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 59.15% |
| Values | Daily Returns |
PIMCO Enhanced Short vs. Dimensional ETF Trust
Performance |
| Timeline |
| PIMCO Enhanced Short |
| Dimensional ETF Trust |
PIMCO Enhanced and Dimensional ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PIMCO Enhanced and Dimensional ETF
The main advantage of trading using opposite PIMCO Enhanced and Dimensional ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PIMCO Enhanced position performs unexpectedly, Dimensional 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 Dimensional ETF will offset losses from the drop in Dimensional ETF'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 |
| Dimensional ETF vs. First Trust Low | Dimensional ETF vs. First Trust Senior | Dimensional ETF vs. First Trust TCW | Dimensional ETF vs. First Trust Tactical |
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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