Correlation Between PIMCO Enhanced and Virtus ETF
Can any of the company-specific risk be diversified away by investing in both PIMCO Enhanced and Virtus 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 Virtus 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 Virtus ETF Trust, you can compare the effects of market volatilities on PIMCO Enhanced and Virtus 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 Virtus ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of PIMCO Enhanced and Virtus ETF.
Diversification Opportunities for PIMCO Enhanced and Virtus ETF
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between PIMCO and Virtus is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding PIMCO Enhanced Short and Virtus ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virtus 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 Virtus ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virtus ETF Trust has no effect on the direction of PIMCO Enhanced i.e., PIMCO Enhanced and Virtus ETF go up and down completely randomly.
Pair Corralation between PIMCO Enhanced and Virtus ETF
Given the investment horizon of 90 days PIMCO Enhanced is expected to generate 1.14 times less return on investment than Virtus ETF. But when comparing it to its historical volatility, PIMCO Enhanced Short is 4.58 times less risky than Virtus ETF. It trades about 0.71 of its potential returns per unit of risk. Virtus ETF Trust is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 2,405 in Virtus ETF Trust on August 27, 2024 and sell it today you would earn a total of 172.00 from holding Virtus ETF Trust or generate 7.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 52.02% |
| Values | Daily Returns |
PIMCO Enhanced Short vs. Virtus ETF Trust
Performance |
| Timeline |
| PIMCO Enhanced Short |
| Virtus ETF Trust |
PIMCO Enhanced and Virtus ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PIMCO Enhanced and Virtus ETF
The main advantage of trading using opposite PIMCO Enhanced and Virtus ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PIMCO Enhanced position performs unexpectedly, Virtus 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 Virtus ETF will offset losses from the drop in Virtus 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 |
| Virtus ETF vs. Valued Advisers Trust | Virtus ETF vs. Columbia Diversified Fixed | Virtus ETF vs. Principal Exchange Traded Funds | Virtus ETF vs. Doubleline Etf Trust |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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