Correlation Between Pimco All and Old Westbury
Can any of the company-specific risk be diversified away by investing in both Pimco All and Old Westbury 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 Old Westbury 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 Old Westbury Municipal, you can compare the effects of market volatilities on Pimco All and Old Westbury 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 Old Westbury. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco All and Old Westbury.
Diversification Opportunities for Pimco All and Old Westbury
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Pimco and Old is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Pimco All Asset and Old Westbury Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Old Westbury Municipal 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 Old Westbury. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Old Westbury Municipal has no effect on the direction of Pimco All i.e., Pimco All and Old Westbury go up and down completely randomly.
Pair Corralation between Pimco All and Old Westbury
Assuming the 90 days horizon Pimco All Asset is expected to generate 2.18 times more return on investment than Old Westbury. However, Pimco All is 2.18 times more volatile than Old Westbury Municipal. It trades about 0.22 of its potential returns per unit of risk. Old Westbury Municipal is currently generating about 0.1 per unit of risk. If you would invest 1,086 in Pimco All Asset on November 4, 2024 and sell it today you would earn a total of 18.00 from holding Pimco All Asset or generate 1.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pimco All Asset vs. Old Westbury Municipal
Performance |
| Timeline |
| Pimco All Asset |
| Old Westbury Municipal |
Pimco All and Old Westbury Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pimco All and Old Westbury
The main advantage of trading using opposite Pimco All and Old Westbury positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco All position performs unexpectedly, Old Westbury 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 Old Westbury will offset losses from the drop in Old Westbury's long position.| Pimco All vs. Tax Managed Mid Small | Pimco All vs. Praxis Small Cap | Pimco All vs. Ab Small Cap | Pimco All vs. Kinetics Small Cap |
| Old Westbury vs. Rbb Fund | Old Westbury vs. Morningstar Global Income | Old Westbury vs. Dws Global Macro | Old Westbury vs. Ab Global Bond |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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