Correlation Between NYSE Composite and Pimco Flexible
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Pimco Flexible 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 Flexible 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 Flexible Credit, you can compare the effects of market volatilities on NYSE Composite and Pimco Flexible 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 Flexible. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Pimco Flexible.
Diversification Opportunities for NYSE Composite and Pimco Flexible
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NYSE and Pimco is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Pimco Flexible Credit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco Flexible Credit 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 Flexible. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco Flexible Credit has no effect on the direction of NYSE Composite i.e., NYSE Composite and Pimco Flexible go up and down completely randomly.
Pair Corralation between NYSE Composite and Pimco Flexible
Assuming the 90 days trading horizon NYSE Composite is expected to generate 2.9 times more return on investment than Pimco Flexible. However, NYSE Composite is 2.9 times more volatile than Pimco Flexible Credit. It trades about 0.14 of its potential returns per unit of risk. Pimco Flexible Credit is currently generating about 0.24 per unit of risk. If you would invest 1,798,563 in NYSE Composite on September 5, 2024 and sell it today you would earn a total of 220,297 from holding NYSE Composite or generate 12.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Pimco Flexible Credit
Performance |
| Timeline |
NYSE Composite and Pimco Flexible Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Pimco Flexible Credit
Pair trading matchups for Pimco Flexible
Pair Trading with NYSE Composite and Pimco Flexible
The main advantage of trading using opposite NYSE Composite and Pimco Flexible positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Pimco Flexible 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 Flexible will offset losses from the drop in Pimco Flexible's long position.| NYSE Composite vs. Air Products and | NYSE Composite vs. Playtika Holding Corp | NYSE Composite vs. PepsiCo | NYSE Composite vs. NETGEAR |
| Pimco Flexible vs. Pace High Yield | Pimco Flexible vs. Pioneer High Yield | Pimco Flexible vs. American Century High | Pimco Flexible vs. Msift High Yield |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
Other Complementary Tools
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world |