Correlation Between Pimco Flexible and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Pimco Flexible and Dow Jones 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 Flexible and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pimco Flexible Credit and Dow Jones Industrial, you can compare the effects of market volatilities on Pimco Flexible and Dow Jones 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 Flexible with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco Flexible and Dow Jones.
Diversification Opportunities for Pimco Flexible and Dow Jones
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Pimco and Dow is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Flexible Credit and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial and Pimco Flexible 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 Flexible Credit are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Pimco Flexible i.e., Pimco Flexible and Dow Jones go up and down completely randomly.
Pair Corralation between Pimco Flexible and Dow Jones
Assuming the 90 days horizon Pimco Flexible is expected to generate 2.19 times less return on investment than Dow Jones. But when comparing it to its historical volatility, Pimco Flexible Credit is 3.25 times less risky than Dow Jones. It trades about 0.24 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 3,879,899 in Dow Jones Industrial on September 5, 2024 and sell it today you would earn a total of 621,505 from holding Dow Jones Industrial or generate 16.02% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Pimco Flexible Credit vs. Dow Jones Industrial
Performance |
Timeline |
Pimco Flexible and Dow Jones Volatility Contrast
Predicted Return Density |
Returns |
Pimco Flexible Credit
Pair trading matchups for Pimco Flexible
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Pimco Flexible and Dow Jones
The main advantage of trading using opposite Pimco Flexible and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco Flexible position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.Pimco Flexible vs. Pace High Yield | Pimco Flexible vs. Pioneer High Yield | Pimco Flexible vs. American Century High | Pimco Flexible vs. Msift High Yield |
Dow Jones vs. Shake Shack | Dow Jones vs. Artisan Partners Asset | Dow Jones vs. Dave Busters Entertainment | Dow Jones vs. Meli Hotels International |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Complementary Tools
Money Managers Screen money managers from public funds and ETFs managed around the world | |
Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios |