Correlation Between Pimco Energy and Cm Commodity
Can any of the company-specific risk be diversified away by investing in both Pimco Energy 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 Energy 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 Energy Tactical and Cm Modity Index, you can compare the effects of market volatilities on Pimco Energy 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 Energy with a short position of Cm Commodity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco Energy and Cm Commodity.
Diversification Opportunities for Pimco Energy and Cm Commodity
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Pimco and CMCYX is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Energy Tactical 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 Energy 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 Energy Tactical 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 Energy i.e., Pimco Energy and Cm Commodity go up and down completely randomly.
Pair Corralation between Pimco Energy and Cm Commodity
Considering the 90-day investment horizon Pimco Energy Tactical is expected to generate 9.61 times more return on investment than Cm Commodity. However, Pimco Energy is 9.61 times more volatile than Cm Modity Index. It trades about 0.07 of its potential returns per unit of risk. Cm Modity Index is currently generating about 0.4 per unit of risk. If you would invest 2,595 in Pimco Energy Tactical on October 28, 2024 and sell it today you would earn a total of 124.00 from holding Pimco Energy Tactical or generate 4.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pimco Energy Tactical vs. Cm Modity Index
Performance |
| Timeline |
| Pimco Energy Tactical |
| Cm Modity Index |
Pimco Energy and Cm Commodity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pimco Energy and Cm Commodity
The main advantage of trading using opposite Pimco Energy and Cm Commodity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco Energy 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 Energy vs. Cognios Market Neutral | Pimco Energy vs. Sp Midcap Index | Pimco Energy vs. Western Asset Diversified | Pimco Energy vs. Fidelity New Markets |
| Cm Commodity vs. Pgim Jennison Natural | Cm Commodity vs. Allianzgi Global Natural | Cm Commodity vs. Pimco Energy Tactical | Cm Commodity vs. Adams Natural Resources |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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