Correlation Between Pimco Capital and Long-term
Can any of the company-specific risk be diversified away by investing in both Pimco Capital and Long-term 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 Long-term 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 Long Term Government Fund, you can compare the effects of market volatilities on Pimco Capital and Long-term 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 Long-term. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco Capital and Long-term.
Diversification Opportunities for Pimco Capital and Long-term
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Pimco and Long-term is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Capital Sec and Long Term Government Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Long Term Government 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 Long-term. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Long Term Government has no effect on the direction of Pimco Capital i.e., Pimco Capital and Long-term go up and down completely randomly.
Pair Corralation between Pimco Capital and Long-term
Assuming the 90 days horizon Pimco Capital Sec is expected to generate 0.17 times more return on investment than Long-term. However, Pimco Capital Sec is 6.04 times less risky than Long-term. It trades about 0.2 of its potential returns per unit of risk. Long Term Government Fund is currently generating about -0.07 per unit of risk. If you would invest 921.00 in Pimco Capital Sec on August 29, 2024 and sell it today you would earn a total of 15.00 from holding Pimco Capital Sec or generate 1.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.44% |
| Values | Daily Returns |
Pimco Capital Sec vs. Long Term Government Fund
Performance |
| Timeline |
| Pimco Capital Sec |
| Long Term Government |
Pimco Capital and Long-term Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pimco Capital and Long-term
The main advantage of trading using opposite Pimco Capital and Long-term positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco Capital position performs unexpectedly, Long-term 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 Long-term will offset losses from the drop in Long-term's 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 |
| Long-term vs. T Rowe Price | Long-term vs. Dodge Cox Stock | Long-term vs. Strategic Allocation Aggressive | Long-term 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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