Correlation Between Pimco Extended and Lgm Risk
Can any of the company-specific risk be diversified away by investing in both Pimco Extended and Lgm Risk 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 Extended and Lgm Risk into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pimco Extended Duration and Lgm Risk Managed, you can compare the effects of market volatilities on Pimco Extended and Lgm Risk 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 Extended with a short position of Lgm Risk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco Extended and Lgm Risk.
Diversification Opportunities for Pimco Extended and Lgm Risk
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Pimco and Lgm is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Extended Duration and Lgm Risk Managed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lgm Risk Managed and Pimco Extended 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 Extended Duration are associated (or correlated) with Lgm Risk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lgm Risk Managed has no effect on the direction of Pimco Extended i.e., Pimco Extended and Lgm Risk go up and down completely randomly.
Pair Corralation between Pimco Extended and Lgm Risk
Assuming the 90 days horizon Pimco Extended Duration is expected to generate 5.54 times more return on investment than Lgm Risk. However, Pimco Extended is 5.54 times more volatile than Lgm Risk Managed. It trades about 0.08 of its potential returns per unit of risk. Lgm Risk Managed is currently generating about 0.37 per unit of risk. If you would invest 1,368 in Pimco Extended Duration on September 3, 2024 and sell it today you would earn a total of 34.00 from holding Pimco Extended Duration or generate 2.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pimco Extended Duration vs. Lgm Risk Managed
Performance |
| Timeline |
| Pimco Extended Duration |
| Lgm Risk Managed |
Pimco Extended and Lgm Risk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pimco Extended and Lgm Risk
The main advantage of trading using opposite Pimco Extended and Lgm Risk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco Extended position performs unexpectedly, Lgm Risk 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 Lgm Risk will offset losses from the drop in Lgm Risk's long position.| Pimco Extended vs. Fidelity Series Long Term | Pimco Extended vs. Vanguard Long Term Government | Pimco Extended vs. Us Treasury Long Term | Pimco Extended vs. Us Treasury Long Term |
| Lgm Risk vs. Vanguard California Long Term | Lgm Risk vs. Lind Capital Partners | Lgm Risk vs. T Rowe Price | Lgm Risk vs. T Rowe Price |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
Other Complementary Tools
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like |