Correlation Between Pimco California and Pimco New
Can any of the company-specific risk be diversified away by investing in both Pimco California and Pimco New 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 California and Pimco New into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pimco California Municipal and Pimco New York, you can compare the effects of market volatilities on Pimco California and Pimco New 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 California with a short position of Pimco New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco California and Pimco New.
Diversification Opportunities for Pimco California and Pimco New
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Pimco and Pimco is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Pimco California Municipal and Pimco New York in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco New York and Pimco California 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 California Municipal are associated (or correlated) with Pimco New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco New York has no effect on the direction of Pimco California i.e., Pimco California and Pimco New go up and down completely randomly.
Pair Corralation between Pimco California and Pimco New
Considering the 90-day investment horizon Pimco California Municipal is expected to under-perform the Pimco New. In addition to that, Pimco California is 1.64 times more volatile than Pimco New York. It trades about -0.07 of its total potential returns per unit of risk. Pimco New York is currently generating about 0.0 per unit of volatility. If you would invest 746.00 in Pimco New York on September 2, 2024 and sell it today you would earn a total of 4.00 from holding Pimco New York or generate 0.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pimco California Municipal vs. Pimco New York
Performance |
| Timeline |
| Pimco California Mun |
| Pimco New York |
Pimco California and Pimco New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pimco California and Pimco New
The main advantage of trading using opposite Pimco California and Pimco New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco California position performs unexpectedly, Pimco New 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 New will offset losses from the drop in Pimco New's long position.| Pimco California vs. Pimco California Municipal | Pimco California vs. Nuveen California Amt | Pimco California vs. Eaton Vance California | Pimco California vs. Invesco California Value |
| Pimco New vs. Pimco New York | Pimco New vs. Pimco California Municipal | Pimco New vs. Pimco Municipal Income | Pimco New vs. Pimco California Municipal |
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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
Other Complementary Tools
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years |