Correlation Between Pimco All and Columbia Thermostat
Can any of the company-specific risk be diversified away by investing in both Pimco All and Columbia Thermostat 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 Columbia Thermostat 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 Columbia Thermostat Fund, you can compare the effects of market volatilities on Pimco All and Columbia Thermostat 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 Columbia Thermostat. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco All and Columbia Thermostat.
Diversification Opportunities for Pimco All and Columbia Thermostat
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Pimco and Columbia is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Pimco All Asset and Columbia Thermostat Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Thermostat 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 Columbia Thermostat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Thermostat has no effect on the direction of Pimco All i.e., Pimco All and Columbia Thermostat go up and down completely randomly.
Pair Corralation between Pimco All and Columbia Thermostat
Assuming the 90 days horizon Pimco All is expected to generate 2.56 times less return on investment than Columbia Thermostat. In addition to that, Pimco All is 1.04 times more volatile than Columbia Thermostat Fund. It trades about 0.03 of its total potential returns per unit of risk. Columbia Thermostat Fund is currently generating about 0.07 per unit of volatility. If you would invest 1,660 in Columbia Thermostat Fund on August 28, 2024 and sell it today you would earn a total of 24.00 from holding Columbia Thermostat Fund or generate 1.45% 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. Columbia Thermostat Fund
Performance |
| Timeline |
| Pimco All Asset |
| Columbia Thermostat |
Pimco All and Columbia Thermostat Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pimco All and Columbia Thermostat
The main advantage of trading using opposite Pimco All and Columbia Thermostat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco All position performs unexpectedly, Columbia Thermostat 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 Columbia Thermostat will offset losses from the drop in Columbia Thermostat's long position.| Pimco All vs. Pimco Rae Worldwide | Pimco All vs. Pimco Rae Worldwide | Pimco All vs. Pimco Rae Worldwide | Pimco All 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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