Correlation Between Emerging Markets and Pimco Rae
Can any of the company-specific risk be diversified away by investing in both Emerging Markets and Pimco Rae 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 Emerging Markets and Pimco Rae into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Emerging Markets Bond and Pimco Rae Worldwide, you can compare the effects of market volatilities on Emerging Markets and Pimco Rae 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 Emerging Markets with a short position of Pimco Rae. Check out your portfolio center. Please also check ongoing floating volatility patterns of Emerging Markets and Pimco Rae.
Diversification Opportunities for Emerging Markets and Pimco Rae
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Emerging and Pimco is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Emerging Markets Bond and Pimco Rae Worldwide in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco Rae Worldwide and Emerging Markets 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 Emerging Markets Bond are associated (or correlated) with Pimco Rae. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco Rae Worldwide has no effect on the direction of Emerging Markets i.e., Emerging Markets and Pimco Rae go up and down completely randomly.
Pair Corralation between Emerging Markets and Pimco Rae
Assuming the 90 days horizon Emerging Markets Bond is expected to generate 0.9 times more return on investment than Pimco Rae. However, Emerging Markets Bond is 1.12 times less risky than Pimco Rae. It trades about 0.09 of its potential returns per unit of risk. Pimco Rae Worldwide is currently generating about 0.08 per unit of risk. If you would invest 713.00 in Emerging Markets Bond on August 26, 2024 and sell it today you would earn a total of 139.00 from holding Emerging Markets Bond or generate 19.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Emerging Markets Bond vs. Pimco Rae Worldwide
Performance |
| Timeline |
| Emerging Markets Bond |
| Pimco Rae Worldwide |
Emerging Markets and Pimco Rae Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Emerging Markets and Pimco Rae
The main advantage of trading using opposite Emerging Markets and Pimco Rae positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Emerging Markets position performs unexpectedly, Pimco Rae 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 Rae will offset losses from the drop in Pimco Rae's long position.| Emerging Markets vs. Pimco Rae Worldwide | Emerging Markets vs. Pimco Rae Worldwide | Emerging Markets vs. Pimco Rae Worldwide | Emerging Markets vs. Pimco Rae Worldwide |
| Pimco Rae vs. Rbb Fund | Pimco Rae vs. Falcon Focus Scv | Pimco Rae vs. Abr 7525 Volatility | Pimco Rae vs. Rbc Microcap Value |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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