Correlation Between NYSE Composite and PIMCO Preferred
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and PIMCO Preferred 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 Preferred 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 Preferred And, you can compare the effects of market volatilities on NYSE Composite and PIMCO Preferred 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 Preferred. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and PIMCO Preferred.
Diversification Opportunities for NYSE Composite and PIMCO Preferred
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NYSE and PIMCO is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and PIMCO Preferred And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PIMCO Preferred And 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 Preferred. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PIMCO Preferred And has no effect on the direction of NYSE Composite i.e., NYSE Composite and PIMCO Preferred go up and down completely randomly.
Pair Corralation between NYSE Composite and PIMCO Preferred
Assuming the 90 days trading horizon NYSE Composite is expected to generate 2.02 times more return on investment than PIMCO Preferred. However, NYSE Composite is 2.02 times more volatile than PIMCO Preferred And. It trades about 0.08 of its potential returns per unit of risk. PIMCO Preferred And is currently generating about 0.07 per unit of risk. If you would invest 1,529,105 in NYSE Composite on August 30, 2024 and sell it today you would earn a total of 491,877 from holding NYSE Composite or generate 32.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 94.75% |
| Values | Daily Returns |
NYSE Composite vs. PIMCO Preferred And
Performance |
| Timeline |
NYSE Composite and PIMCO Preferred Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
PIMCO Preferred And
Pair trading matchups for PIMCO Preferred
Pair Trading with NYSE Composite and PIMCO Preferred
The main advantage of trading using opposite NYSE Composite and PIMCO Preferred positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, PIMCO Preferred 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 Preferred will offset losses from the drop in PIMCO Preferred's long position.| NYSE Composite vs. Sphere Entertainment Co | NYSE Composite vs. Weibo Corp | NYSE Composite vs. BCE Inc | NYSE Composite vs. Pinterest |
| PIMCO Preferred vs. iShares Preferred and | PIMCO Preferred vs. First Trust Preferred | PIMCO Preferred vs. Global X Preferred | PIMCO Preferred vs. Invesco Variable Rate |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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