Correlation Between Pimco Small and Pimco International
Can any of the company-specific risk be diversified away by investing in both Pimco Small and Pimco International 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 Small and Pimco International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pimco Small Cap and Pimco International Stocksplus, you can compare the effects of market volatilities on Pimco Small and Pimco International 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 Small with a short position of Pimco International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco Small and Pimco International.
Diversification Opportunities for Pimco Small and Pimco International
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Pimco and Pimco is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Small Cap and Pimco International Stocksplus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco International and Pimco Small 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 Small Cap are associated (or correlated) with Pimco International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco International has no effect on the direction of Pimco Small i.e., Pimco Small and Pimco International go up and down completely randomly.
Pair Corralation between Pimco Small and Pimco International
Assuming the 90 days horizon Pimco Small Cap is expected to generate 2.22 times more return on investment than Pimco International. However, Pimco Small is 2.22 times more volatile than Pimco International Stocksplus. It trades about 0.12 of its potential returns per unit of risk. Pimco International Stocksplus is currently generating about -0.01 per unit of risk. If you would invest 742.00 in Pimco Small Cap on August 29, 2024 and sell it today you would earn a total of 78.00 from holding Pimco Small Cap or generate 10.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pimco Small Cap vs. Pimco International Stocksplus
Performance |
| Timeline |
| Pimco Small Cap |
| Pimco International |
Pimco Small and Pimco International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pimco Small and Pimco International
The main advantage of trading using opposite Pimco Small and Pimco International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco Small position performs unexpectedly, Pimco International 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 International will offset losses from the drop in Pimco International's long position.| Pimco Small vs. Gnma Fund A | Pimco Small vs. Neuberger Berman Real | Pimco Small vs. Goldman Sachs Balanced | Pimco Small vs. Fundamental Indexplus Tr |
| Pimco International vs. Pimco Small Cap | Pimco International vs. Fundamental Indexplus Tr | Pimco International vs. Stocksplus Total Return | Pimco International vs. Allianzgi Nfj Mid 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
Other Complementary Tools
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency |