Correlation Between NYSE Composite and Pimco High
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Pimco High 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 High 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 High Yield, you can compare the effects of market volatilities on NYSE Composite and Pimco High 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 High. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Pimco High.
Diversification Opportunities for NYSE Composite and Pimco High
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between NYSE and Pimco is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Pimco High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco High Yield 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 High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco High Yield has no effect on the direction of NYSE Composite i.e., NYSE Composite and Pimco High go up and down completely randomly.
Pair Corralation between NYSE Composite and Pimco High
Assuming the 90 days trading horizon NYSE Composite is expected to generate 4.73 times more return on investment than Pimco High. However, NYSE Composite is 4.73 times more volatile than Pimco High Yield. It trades about 0.42 of its potential returns per unit of risk. Pimco High Yield is currently generating about 0.15 per unit of risk. If you would invest 1,923,895 in NYSE Composite on September 1, 2024 and sell it today you would earn a total of 103,309 from holding NYSE Composite or generate 5.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
NYSE Composite vs. Pimco High Yield
Performance |
| Timeline |
NYSE Composite and Pimco High Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Pimco High Yield
Pair trading matchups for Pimco High
Pair Trading with NYSE Composite and Pimco High
The main advantage of trading using opposite NYSE Composite and Pimco High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Pimco High 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 High will offset losses from the drop in Pimco High's long position.| NYSE Composite vs. Acumen Pharmaceuticals | NYSE Composite vs. Mind Medicine | NYSE Composite vs. NL Industries | NYSE Composite vs. Ecovyst |
| Pimco High vs. Pimco Rae Worldwide | Pimco High vs. Pimco Rae Worldwide | Pimco High vs. Pimco Rae Worldwide | Pimco High vs. Pimco Rae Worldwide |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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