Correlation Between Pimco Preferred and Stocksplus Fund
Can any of the company-specific risk be diversified away by investing in both Pimco Preferred and Stocksplus Fund 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 Preferred and Stocksplus Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pimco Preferred And and Stocksplus Fund Institutional, you can compare the effects of market volatilities on Pimco Preferred and Stocksplus Fund 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 Preferred with a short position of Stocksplus Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco Preferred and Stocksplus Fund.
Diversification Opportunities for Pimco Preferred and Stocksplus Fund
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Pimco and Stocksplus is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Preferred And and Stocksplus Fund Institutional in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stocksplus Fund Inst and Pimco Preferred 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 Preferred And are associated (or correlated) with Stocksplus Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stocksplus Fund Inst has no effect on the direction of Pimco Preferred i.e., Pimco Preferred and Stocksplus Fund go up and down completely randomly.
Pair Corralation between Pimco Preferred and Stocksplus Fund
Assuming the 90 days horizon Pimco Preferred is expected to generate 3.45 times less return on investment than Stocksplus Fund. But when comparing it to its historical volatility, Pimco Preferred And is 2.05 times less risky than Stocksplus Fund. It trades about 0.07 of its potential returns per unit of risk. Stocksplus Fund Institutional is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 891.00 in Stocksplus Fund Institutional on August 30, 2024 and sell it today you would earn a total of 511.00 from holding Stocksplus Fund Institutional or generate 57.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pimco Preferred And vs. Stocksplus Fund Institutional
Performance |
| Timeline |
| Pimco Preferred And |
| Stocksplus Fund Inst |
Pimco Preferred and Stocksplus Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pimco Preferred and Stocksplus Fund
The main advantage of trading using opposite Pimco Preferred and Stocksplus Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco Preferred position performs unexpectedly, Stocksplus Fund 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 Stocksplus Fund will offset losses from the drop in Stocksplus Fund's long position.| Pimco Preferred vs. Queens Road Small | Pimco Preferred vs. Amg River Road | Pimco Preferred vs. Great West Loomis Sayles | Pimco Preferred vs. Pace Smallmedium Value |
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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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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