Correlation Between Pimco Small and Stocksplus Total
Can any of the company-specific risk be diversified away by investing in both Pimco Small and Stocksplus Total 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 Stocksplus Total 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 Stocksplus Total Return, you can compare the effects of market volatilities on Pimco Small and Stocksplus Total 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 Stocksplus Total. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco Small and Stocksplus Total.
Diversification Opportunities for Pimco Small and Stocksplus Total
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Pimco and Stocksplus is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Small Cap and Stocksplus Total Return in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stocksplus Total Return 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 Stocksplus Total. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stocksplus Total Return has no effect on the direction of Pimco Small i.e., Pimco Small and Stocksplus Total go up and down completely randomly.
Pair Corralation between Pimco Small and Stocksplus Total
Assuming the 90 days horizon Pimco Small Cap is expected to generate 1.83 times more return on investment than Stocksplus Total. However, Pimco Small is 1.83 times more volatile than Stocksplus Total Return. It trades about 0.14 of its potential returns per unit of risk. Stocksplus Total Return is currently generating about 0.12 per unit of risk. If you would invest 755.00 in Pimco Small Cap on August 29, 2024 and sell it today you would earn a total of 65.00 from holding Pimco Small Cap or generate 8.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pimco Small Cap vs. Stocksplus Total Return
Performance |
| Timeline |
| Pimco Small Cap |
| Stocksplus Total Return |
Pimco Small and Stocksplus Total Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pimco Small and Stocksplus Total
The main advantage of trading using opposite Pimco Small and Stocksplus Total positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco Small position performs unexpectedly, Stocksplus Total 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 Stocksplus Total will offset losses from the drop in Stocksplus Total'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 |
| Stocksplus Total vs. Vanguard Strategic Small Cap | Stocksplus Total vs. Champlain Small | Stocksplus Total vs. Touchstone Small Cap | Stocksplus Total vs. Baird Smallmid 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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