Correlation Between NYSE Composite and PIMCO Intermediate
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and PIMCO Intermediate 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 NYSE Composite and PIMCO Intermediate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and PIMCO Intermediate Municipal, you can compare the effects of market volatilities on NYSE Composite and PIMCO Intermediate 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 NYSE Composite with a short position of PIMCO Intermediate. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and PIMCO Intermediate.
Diversification Opportunities for NYSE Composite and PIMCO Intermediate
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NYSE and PIMCO is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and PIMCO Intermediate Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PIMCO Intermediate and NYSE Composite 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 NYSE Composite are associated (or correlated) with PIMCO Intermediate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PIMCO Intermediate has no effect on the direction of NYSE Composite i.e., NYSE Composite and PIMCO Intermediate go up and down completely randomly.
Pair Corralation between NYSE Composite and PIMCO Intermediate
Assuming the 90 days trading horizon NYSE Composite is expected to generate 1.94 times more return on investment than PIMCO Intermediate. However, NYSE Composite is 1.94 times more volatile than PIMCO Intermediate Municipal. It trades about 0.29 of its potential returns per unit of risk. PIMCO Intermediate Municipal is currently generating about 0.15 per unit of risk. If you would invest 1,941,627 in NYSE Composite on August 31, 2024 and sell it today you would earn a total of 79,355 from holding NYSE Composite or generate 4.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. PIMCO Intermediate Municipal
Performance |
| Timeline |
NYSE Composite and PIMCO Intermediate Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
PIMCO Intermediate Municipal
Pair trading matchups for PIMCO Intermediate
Pair Trading with NYSE Composite and PIMCO Intermediate
The main advantage of trading using opposite NYSE Composite and PIMCO Intermediate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, PIMCO Intermediate 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 Intermediate will offset losses from the drop in PIMCO Intermediate's long position.| NYSE Composite vs. Nextplat Corp | NYSE Composite vs. Qualys Inc | NYSE Composite vs. Cadence Design Systems | NYSE Composite vs. Asure Software |
| PIMCO Intermediate vs. PIMCO Short Term | PIMCO Intermediate vs. VanEck Intermediate Muni | PIMCO Intermediate vs. VanEck Long Muni | PIMCO Intermediate vs. VanEck Short Muni |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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