Correlation Between Pimco All and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Pimco All and Dow Jones 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 Dow Jones 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 Dow Jones Industrial, you can compare the effects of market volatilities on Pimco All and Dow Jones 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 Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco All and Dow Jones.
Diversification Opportunities for Pimco All and Dow Jones
Very good diversification
The 3 months correlation between Pimco and Dow is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Pimco All Asset and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial 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 Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Pimco All i.e., Pimco All and Dow Jones go up and down completely randomly.
Pair Corralation between Pimco All and Dow Jones
Assuming the 90 days horizon Pimco All Asset is expected to under-perform the Dow Jones. But the mutual fund apears to be less risky and, when comparing its historical volatility, Pimco All Asset is 2.75 times less risky than Dow Jones. The mutual fund trades about -0.04 of its potential returns per unit of risk. The Dow Jones Industrial is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 4,211,440 in Dow Jones Industrial on August 26, 2024 and sell it today you would earn a total of 218,211 from holding Dow Jones Industrial or generate 5.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pimco All Asset vs. Dow Jones Industrial
Performance |
| Timeline |
Pimco All and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Pimco All Asset
Pair trading matchups for Pimco All
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Pimco All and Dow Jones
The main advantage of trading using opposite Pimco All and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco All position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' 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 |
| Dow Jones vs. Vistra Energy Corp | Dow Jones vs. Fluence Energy | Dow Jones vs. Old Republic International | Dow Jones vs. Empresa Distribuidora y |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
Other Complementary Tools
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Stocks Directory Find actively traded stocks across global markets | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA |