Correlation Between Pimco Preferred and Long-term
Can any of the company-specific risk be diversified away by investing in both Pimco Preferred 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 Preferred 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 Preferred And and Long Term Government Fund, you can compare the effects of market volatilities on Pimco Preferred 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 Preferred with a short position of Long-term. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco Preferred and Long-term.
Diversification Opportunities for Pimco Preferred and Long-term
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Pimco and Long-term is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Preferred And 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 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 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 Preferred i.e., Pimco Preferred and Long-term go up and down completely randomly.
Pair Corralation between Pimco Preferred and Long-term
Assuming the 90 days horizon Pimco Preferred is expected to generate 15.56 times less return on investment than Long-term. But when comparing it to its historical volatility, Pimco Preferred And is 33.8 times less risky than Long-term. It trades about 0.07 of its potential returns per unit of risk. Long Term Government Fund is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,490 in Long Term Government Fund on August 31, 2024 and sell it today you would lose (51.00) from holding Long Term Government Fund or give up 3.42% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pimco Preferred And vs. Long Term Government Fund
Performance |
| Timeline |
| Pimco Preferred And |
| Long Term Government |
Pimco Preferred and Long-term Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pimco Preferred and Long-term
The main advantage of trading using opposite Pimco Preferred and Long-term positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco Preferred 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 Preferred vs. Nuveen Arizona Municipal | Pimco Preferred vs. Ab Impact Municipal | Pimco Preferred vs. Old Westbury Municipal | Pimco Preferred vs. Nuveen Minnesota Municipal |
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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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