Correlation Between Picton Mahoney and PIMCO Monthly
Can any of the company-specific risk be diversified away by investing in both Picton Mahoney and PIMCO Monthly 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 Picton Mahoney and PIMCO Monthly into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Picton Mahoney Fortified and PIMCO Monthly Income, you can compare the effects of market volatilities on Picton Mahoney and PIMCO Monthly 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 Picton Mahoney with a short position of PIMCO Monthly. Check out your portfolio center. Please also check ongoing floating volatility patterns of Picton Mahoney and PIMCO Monthly.
Diversification Opportunities for Picton Mahoney and PIMCO Monthly
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Picton and PIMCO is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Picton Mahoney Fortified and PIMCO Monthly Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PIMCO Monthly Income and Picton Mahoney 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 Picton Mahoney Fortified are associated (or correlated) with PIMCO Monthly. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PIMCO Monthly Income has no effect on the direction of Picton Mahoney i.e., Picton Mahoney and PIMCO Monthly go up and down completely randomly.
Pair Corralation between Picton Mahoney and PIMCO Monthly
Assuming the 90 days trading horizon Picton Mahoney is expected to generate 1.11 times less return on investment than PIMCO Monthly. But when comparing it to its historical volatility, Picton Mahoney Fortified is 1.08 times less risky than PIMCO Monthly. It trades about 0.09 of its potential returns per unit of risk. PIMCO Monthly Income is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,566 in PIMCO Monthly Income on November 27, 2024 and sell it today you would earn a total of 235.00 from holding PIMCO Monthly Income or generate 15.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Picton Mahoney Fortified vs. PIMCO Monthly Income
Performance |
| Timeline |
| Picton Mahoney Fortified |
| PIMCO Monthly Income |
Picton Mahoney and PIMCO Monthly Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Picton Mahoney and PIMCO Monthly
The main advantage of trading using opposite Picton Mahoney and PIMCO Monthly positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Picton Mahoney position performs unexpectedly, PIMCO Monthly 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 Monthly will offset losses from the drop in PIMCO Monthly's long position.| Picton Mahoney vs. PIMCO Monthly Income | Picton Mahoney vs. Picton Mahoney Fortified | Picton Mahoney vs. Mackenzie Unconstrained Bond | Picton Mahoney vs. NBI Liquid Alternatives |
| PIMCO Monthly vs. Mackenzie Unconstrained Bond | PIMCO Monthly vs. Global X Active | PIMCO Monthly vs. Mackenzie Floating Rate | PIMCO Monthly vs. PIMCO Investment Grade |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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