Correlation Between Global X and PIMCO Preferred
Can any of the company-specific risk be diversified away by investing in both Global X and PIMCO Preferred 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 Global X and PIMCO Preferred into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global X Preferred and PIMCO Preferred And, you can compare the effects of market volatilities on Global X and PIMCO Preferred 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 Global X with a short position of PIMCO Preferred. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and PIMCO Preferred.
Diversification Opportunities for Global X and PIMCO Preferred
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Global and PIMCO is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Global X Preferred and PIMCO Preferred And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PIMCO Preferred And and Global X 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 Global X Preferred are associated (or correlated) with PIMCO Preferred. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PIMCO Preferred And has no effect on the direction of Global X i.e., Global X and PIMCO Preferred go up and down completely randomly.
Pair Corralation between Global X and PIMCO Preferred
Given the investment horizon of 90 days Global X is expected to generate 17.95 times less return on investment than PIMCO Preferred. In addition to that, Global X is 2.94 times more volatile than PIMCO Preferred And. It trades about 0.0 of its total potential returns per unit of risk. PIMCO Preferred And is currently generating about 0.16 per unit of volatility. If you would invest 5,077 in PIMCO Preferred And on August 30, 2024 and sell it today you would earn a total of 38.00 from holding PIMCO Preferred And or generate 0.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Global X Preferred vs. PIMCO Preferred And
Performance |
| Timeline |
| Global X Preferred |
| PIMCO Preferred And |
Global X and PIMCO Preferred Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global X and PIMCO Preferred
The main advantage of trading using opposite Global X and PIMCO Preferred positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X position performs unexpectedly, PIMCO Preferred 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 PIMCO Preferred will offset losses from the drop in PIMCO Preferred's long position.| Global X vs. VanEck Preferred Securities | Global X vs. Global X SuperIncome | Global X vs. Virtus InfraCap Preferred | Global X vs. SPDR ICE Preferred |
| PIMCO Preferred vs. iShares Preferred and | PIMCO Preferred vs. First Trust Preferred | PIMCO Preferred vs. Global X Preferred | PIMCO Preferred vs. Invesco Variable Rate |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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