Correlation Between Pimco Capital and Pimco Long
Can any of the company-specific risk be diversified away by investing in both Pimco Capital and Pimco Long 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 Pimco Long 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 Pimco Long Duration, you can compare the effects of market volatilities on Pimco Capital and Pimco Long 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 Pimco Long. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco Capital and Pimco Long.
Diversification Opportunities for Pimco Capital and Pimco Long
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Pimco and Pimco is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Capital Sec and Pimco Long Duration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco Long Duration 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 Pimco Long. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco Long Duration has no effect on the direction of Pimco Capital i.e., Pimco Capital and Pimco Long go up and down completely randomly.
Pair Corralation between Pimco Capital and Pimco Long
Assuming the 90 days horizon Pimco Capital Sec is expected to generate 0.25 times more return on investment than Pimco Long. However, Pimco Capital Sec is 3.93 times less risky than Pimco Long. It trades about 0.3 of its potential returns per unit of risk. Pimco Long Duration is currently generating about 0.03 per unit of risk. If you would invest 822.00 in Pimco Capital Sec on August 27, 2024 and sell it today you would earn a total of 118.00 from holding Pimco Capital Sec or generate 14.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pimco Capital Sec vs. Pimco Long Duration
Performance |
| Timeline |
| Pimco Capital Sec |
| Pimco Long Duration |
Pimco Capital and Pimco Long Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pimco Capital and Pimco Long
The main advantage of trading using opposite Pimco Capital and Pimco Long positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco Capital position performs unexpectedly, Pimco Long 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 Long will offset losses from the drop in Pimco Long's long position.| Pimco Capital vs. Pimco Mortgage Opportunities | Pimco Capital vs. Pimco Floating Income | Pimco Capital vs. Pimco High Yield | Pimco Capital vs. Pimco Income Fund |
| Pimco Long vs. Pimco Rae Worldwide | Pimco Long vs. Pimco Rae Worldwide | Pimco Long vs. Pimco Rae Worldwide | Pimco Long vs. Pimco Rae Worldwide |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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