Correlation Between Pimco All and Ep Emerging
Can any of the company-specific risk be diversified away by investing in both Pimco All and Ep Emerging 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 Pimco All and Ep Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pimco All Asset and Ep Emerging Markets, you can compare the effects of market volatilities on Pimco All and Ep Emerging 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 Pimco All with a short position of Ep Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco All and Ep Emerging.
Diversification Opportunities for Pimco All and Ep Emerging
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between PIMCO and EPASX is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Pimco All Asset and Ep Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ep Emerging Markets and Pimco All 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 Pimco All Asset are associated (or correlated) with Ep Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ep Emerging Markets has no effect on the direction of Pimco All i.e., Pimco All and Ep Emerging go up and down completely randomly.
Pair Corralation between Pimco All and Ep Emerging
Assuming the 90 days horizon Pimco All Asset is expected to generate 0.38 times more return on investment than Ep Emerging. However, Pimco All Asset is 2.66 times less risky than Ep Emerging. It trades about -0.07 of its potential returns per unit of risk. Ep Emerging Markets is currently generating about -0.2 per unit of risk. If you would invest 1,149 in Pimco All Asset on August 29, 2024 and sell it today you would lose (14.00) from holding Pimco All Asset or give up 1.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 97.67% |
| Values | Daily Returns |
Pimco All Asset vs. Ep Emerging Markets
Performance |
| Timeline |
| Pimco All Asset |
| Ep Emerging Markets |
Pimco All and Ep Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pimco All and Ep Emerging
The main advantage of trading using opposite Pimco All and Ep Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco All position performs unexpectedly, Ep Emerging 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 Ep Emerging will offset losses from the drop in Ep Emerging's long position.| Pimco All vs. Mirova Global Green | Pimco All vs. Ab Select Longshort | Pimco All vs. Versatile Bond Portfolio | Pimco All vs. Vanguard Emerging Markets |
| Ep Emerging vs. Baird Smallmid Cap | Ep Emerging vs. Ab Small Cap | Ep Emerging vs. Small Pany Growth | Ep Emerging vs. Artisan Small Cap |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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