Correlation Between Pimco Commoditiesplus and Commodity Return
Can any of the company-specific risk be diversified away by investing in both Pimco Commoditiesplus and Commodity Return 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 Commoditiesplus and Commodity Return into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pimco Moditiesplus Strategy and Commodity Return Strategy, you can compare the effects of market volatilities on Pimco Commoditiesplus and Commodity Return 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 Commoditiesplus with a short position of Commodity Return. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco Commoditiesplus and Commodity Return.
Diversification Opportunities for Pimco Commoditiesplus and Commodity Return
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between PIMCO and Commodity is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Moditiesplus Strategy and Commodity Return Strategy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Commodity Return Strategy and Pimco Commoditiesplus 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 Moditiesplus Strategy are associated (or correlated) with Commodity Return. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Commodity Return Strategy has no effect on the direction of Pimco Commoditiesplus i.e., Pimco Commoditiesplus and Commodity Return go up and down completely randomly.
Pair Corralation between Pimco Commoditiesplus and Commodity Return
Assuming the 90 days horizon Pimco Moditiesplus Strategy is expected to generate 1.28 times more return on investment than Commodity Return. However, Pimco Commoditiesplus is 1.28 times more volatile than Commodity Return Strategy. It trades about -0.01 of its potential returns per unit of risk. Commodity Return Strategy is currently generating about -0.03 per unit of risk. If you would invest 642.00 in Pimco Moditiesplus Strategy on September 1, 2024 and sell it today you would lose (15.00) from holding Pimco Moditiesplus Strategy or give up 2.34% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pimco Moditiesplus Strategy vs. Commodity Return Strategy
Performance |
| Timeline |
| Pimco Commoditiesplus |
| Commodity Return Strategy |
Pimco Commoditiesplus and Commodity Return Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pimco Commoditiesplus and Commodity Return
The main advantage of trading using opposite Pimco Commoditiesplus and Commodity Return positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco Commoditiesplus position performs unexpectedly, Commodity Return 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 Commodity Return will offset losses from the drop in Commodity Return's long position.| Pimco Commoditiesplus vs. Lord Abbett Small | Pimco Commoditiesplus vs. Palm Valley Capital | Pimco Commoditiesplus vs. Heartland Value Plus | Pimco Commoditiesplus vs. Fidelity Small Cap |
| Commodity Return vs. Credit Suisse Floating | Commodity Return vs. Credit Suisse Floating | Commodity Return vs. Credit Suisse Modity | Commodity Return vs. Credit Suisse Modity |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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