Correlation Between PIMCO Intermediate and PIMCO Short
Can any of the company-specific risk be diversified away by investing in both PIMCO Intermediate and PIMCO Short 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 Intermediate and PIMCO Short into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PIMCO Intermediate Municipal and PIMCO Short Term, you can compare the effects of market volatilities on PIMCO Intermediate and PIMCO Short 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 Intermediate with a short position of PIMCO Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of PIMCO Intermediate and PIMCO Short.
Diversification Opportunities for PIMCO Intermediate and PIMCO Short
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between PIMCO and PIMCO is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding PIMCO Intermediate Municipal and PIMCO Short Term in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PIMCO Short Term and PIMCO Intermediate 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 Intermediate Municipal are associated (or correlated) with PIMCO Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PIMCO Short Term has no effect on the direction of PIMCO Intermediate i.e., PIMCO Intermediate and PIMCO Short go up and down completely randomly.
Pair Corralation between PIMCO Intermediate and PIMCO Short
Given the investment horizon of 90 days PIMCO Intermediate Municipal is expected to generate 1.87 times more return on investment than PIMCO Short. However, PIMCO Intermediate is 1.87 times more volatile than PIMCO Short Term. It trades about 0.08 of its potential returns per unit of risk. PIMCO Short Term is currently generating about 0.07 per unit of risk. If you would invest 5,184 in PIMCO Intermediate Municipal on August 24, 2024 and sell it today you would earn a total of 28.00 from holding PIMCO Intermediate Municipal or generate 0.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
PIMCO Intermediate Municipal vs. PIMCO Short Term
Performance |
| Timeline |
| PIMCO Intermediate |
| PIMCO Short Term |
PIMCO Intermediate and PIMCO Short Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PIMCO Intermediate and PIMCO Short
The main advantage of trading using opposite PIMCO Intermediate and PIMCO Short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PIMCO Intermediate position performs unexpectedly, PIMCO Short 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 Short will offset losses from the drop in PIMCO Short's long position.| PIMCO Intermediate vs. PIMCO Short Term | PIMCO Intermediate vs. VanEck Intermediate Muni | PIMCO Intermediate vs. VanEck Long Muni | PIMCO Intermediate vs. VanEck Short Muni |
| PIMCO Short vs. PIMCO Intermediate Municipal | PIMCO Short vs. VanEck Short Muni | PIMCO Short vs. iShares Short Term National | PIMCO Short vs. SPDR Nuveen Bloomberg |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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