Correlation Between Multi Manager and Pimco Energy
Can any of the company-specific risk be diversified away by investing in both Multi Manager and Pimco Energy 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 Multi Manager and Pimco Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Multi Manager High Yield and Pimco Energy Tactical, you can compare the effects of market volatilities on Multi Manager and Pimco Energy 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 Multi Manager with a short position of Pimco Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Multi Manager and Pimco Energy.
Diversification Opportunities for Multi Manager and Pimco Energy
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Multi and Pimco is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Multi Manager High Yield and Pimco Energy Tactical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco Energy Tactical and Multi Manager 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 Multi Manager High Yield are associated (or correlated) with Pimco Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco Energy Tactical has no effect on the direction of Multi Manager i.e., Multi Manager and Pimco Energy go up and down completely randomly.
Pair Corralation between Multi Manager and Pimco Energy
Assuming the 90 days horizon Multi Manager High Yield is expected to generate 0.03 times more return on investment than Pimco Energy. However, Multi Manager High Yield is 38.74 times less risky than Pimco Energy. It trades about 0.44 of its potential returns per unit of risk. Pimco Energy Tactical is currently generating about 0.0 per unit of risk. If you would invest 838.00 in Multi Manager High Yield on October 31, 2024 and sell it today you would earn a total of 11.00 from holding Multi Manager High Yield or generate 1.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Multi Manager High Yield vs. Pimco Energy Tactical
Performance |
| Timeline |
| Multi Manager High |
| Pimco Energy Tactical |
Multi Manager and Pimco Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Multi Manager and Pimco Energy
The main advantage of trading using opposite Multi Manager and Pimco Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Multi Manager position performs unexpectedly, Pimco Energy 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 Energy will offset losses from the drop in Pimco Energy's long position.| Multi Manager vs. Locorr Market Trend | Multi Manager vs. Aqr Sustainable Long Short | Multi Manager vs. Artisan Developing World | Multi Manager vs. Saat Market Growth |
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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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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