Correlation Between Pimco Energy and Short Oil
Can any of the company-specific risk be diversified away by investing in both Pimco Energy and Short Oil 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 Short Oil 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 Short Oil Gas, you can compare the effects of market volatilities on Pimco Energy and Short Oil 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 Short Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco Energy and Short Oil.
Diversification Opportunities for Pimco Energy and Short Oil
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Pimco and Short is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Energy Tactical and Short Oil Gas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Short Oil Gas 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 Short Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Short Oil Gas has no effect on the direction of Pimco Energy i.e., Pimco Energy and Short Oil go up and down completely randomly.
Pair Corralation between Pimco Energy and Short Oil
Considering the 90-day investment horizon Pimco Energy Tactical is expected to generate 0.85 times more return on investment than Short Oil. However, Pimco Energy Tactical is 1.18 times less risky than Short Oil. It trades about 0.15 of its potential returns per unit of risk. Short Oil Gas is currently generating about 0.03 per unit of risk. If you would invest 1,963 in Pimco Energy Tactical on October 12, 2024 and sell it today you would earn a total of 632.00 from holding Pimco Energy Tactical or generate 32.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pimco Energy Tactical vs. Short Oil Gas
Performance |
| Timeline |
| Pimco Energy Tactical |
| Short Oil Gas |
Pimco Energy and Short Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pimco Energy and Short Oil
The main advantage of trading using opposite Pimco Energy and Short Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco Energy position performs unexpectedly, Short Oil 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 Short Oil will offset losses from the drop in Short Oil's long position.| Pimco Energy vs. Nasdaq 100 Profund Nasdaq 100 | Pimco Energy vs. Alternative Asset Allocation | Pimco Energy vs. Issachar Fund Class | Pimco Energy vs. Rbb Fund |
| Short Oil vs. Fidelity Large Cap | Short Oil vs. Qs Large Cap | Short Oil vs. Avantis Large Cap | Short Oil vs. Tax Managed Large 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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