Correlation Between Pimco Commoditiesplus and Cm Commodity
Can any of the company-specific risk be diversified away by investing in both Pimco Commoditiesplus and Cm Commodity 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 Cm Commodity 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 Cm Modity Index, you can compare the effects of market volatilities on Pimco Commoditiesplus and Cm Commodity 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 Cm Commodity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco Commoditiesplus and Cm Commodity.
Diversification Opportunities for Pimco Commoditiesplus and Cm Commodity
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between PIMCO and CMCAX is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Moditiesplus Strategy and Cm Modity Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cm Modity Index 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 Cm Commodity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cm Modity Index has no effect on the direction of Pimco Commoditiesplus i.e., Pimco Commoditiesplus and Cm Commodity go up and down completely randomly.
Pair Corralation between Pimco Commoditiesplus and Cm Commodity
Assuming the 90 days horizon Pimco Moditiesplus Strategy is expected to generate 1.24 times more return on investment than Cm Commodity. However, Pimco Commoditiesplus is 1.24 times more volatile than Cm Modity Index. It trades about 0.01 of its potential returns per unit of risk. Cm Modity Index is currently generating about -0.02 per unit of risk. If you would invest 626.00 in Pimco Moditiesplus Strategy on September 1, 2024 and sell it today you would earn a total of 1.00 from holding Pimco Moditiesplus Strategy or generate 0.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Pimco Moditiesplus Strategy vs. Cm Modity Index
Performance |
| Timeline |
| Pimco Commoditiesplus |
| Cm Modity Index |
Pimco Commoditiesplus and Cm Commodity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pimco Commoditiesplus and Cm Commodity
The main advantage of trading using opposite Pimco Commoditiesplus and Cm Commodity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco Commoditiesplus position performs unexpectedly, Cm Commodity 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 Cm Commodity will offset losses from the drop in Cm Commodity'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 |
| Cm Commodity vs. Unconstrained Emerging Markets | Cm Commodity vs. Unconstrained Emerging Markets | Cm Commodity vs. Unconstrained Emerging Markets | Cm Commodity vs. Emerging Markets Fund |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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