Correlation Between Pimco Capital and Aristotle Funds
Can any of the company-specific risk be diversified away by investing in both Pimco Capital and Aristotle Funds 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 Capital and Aristotle Funds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pimco Capital Sec and Aristotle Funds Series, you can compare the effects of market volatilities on Pimco Capital and Aristotle Funds 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 Capital with a short position of Aristotle Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco Capital and Aristotle Funds.
Diversification Opportunities for Pimco Capital and Aristotle Funds
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Pimco and Aristotle is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Capital Sec and Aristotle Funds Series in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aristotle Funds Series and Pimco Capital 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 Capital Sec are associated (or correlated) with Aristotle Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aristotle Funds Series has no effect on the direction of Pimco Capital i.e., Pimco Capital and Aristotle Funds go up and down completely randomly.
Pair Corralation between Pimco Capital and Aristotle Funds
Assuming the 90 days horizon Pimco Capital is expected to generate 1.89 times less return on investment than Aristotle Funds. But when comparing it to its historical volatility, Pimco Capital Sec is 5.45 times less risky than Aristotle Funds. It trades about 0.3 of its potential returns per unit of risk. Aristotle Funds Series is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 2,132 in Aristotle Funds Series on September 1, 2024 and sell it today you would earn a total of 219.00 from holding Aristotle Funds Series or generate 10.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pimco Capital Sec vs. Aristotle Funds Series
Performance |
| Timeline |
| Pimco Capital Sec |
| Aristotle Funds Series |
Pimco Capital and Aristotle Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pimco Capital and Aristotle Funds
The main advantage of trading using opposite Pimco Capital and Aristotle Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco Capital position performs unexpectedly, Aristotle Funds 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 Aristotle Funds will offset losses from the drop in Aristotle Funds' long position.| Pimco Capital vs. Nuveen Preferred Securities | Pimco Capital vs. Cohen Steers Preferd | Pimco Capital vs. Pimco Income Fund | Pimco Capital vs. Pimco Floating Income |
| Aristotle Funds vs. Aristotle Funds Series | Aristotle Funds vs. Aristotle Funds Series | Aristotle Funds vs. Aristotle International Eq | Aristotle Funds vs. Aristotle Funds Series |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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