Correlation Between Pimco Capital and Pimco Foreign
Can any of the company-specific risk be diversified away by investing in both Pimco Capital and Pimco Foreign 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 Foreign 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 Foreign Bond, you can compare the effects of market volatilities on Pimco Capital and Pimco Foreign 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 Foreign. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco Capital and Pimco Foreign.
Diversification Opportunities for Pimco Capital and Pimco Foreign
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Pimco and Pimco is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Capital Sec and Pimco Foreign Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco Foreign Bond 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 Foreign. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco Foreign Bond has no effect on the direction of Pimco Capital i.e., Pimco Capital and Pimco Foreign go up and down completely randomly.
Pair Corralation between Pimco Capital and Pimco Foreign
Assuming the 90 days horizon Pimco Capital Sec is expected to under-perform the Pimco Foreign. But the mutual fund apears to be less risky and, when comparing its historical volatility, Pimco Capital Sec is 1.4 times less risky than Pimco Foreign. The mutual fund trades about -0.04 of its potential returns per unit of risk. The Pimco Foreign Bond is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 992.00 in Pimco Foreign Bond on August 24, 2024 and sell it today you would earn a total of 1.00 from holding Pimco Foreign Bond or generate 0.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pimco Capital Sec vs. Pimco Foreign Bond
Performance |
| Timeline |
| Pimco Capital Sec |
| Pimco Foreign Bond |
Pimco Capital and Pimco Foreign Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pimco Capital and Pimco Foreign
The main advantage of trading using opposite Pimco Capital and Pimco Foreign positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco Capital position performs unexpectedly, Pimco Foreign 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 Foreign will offset losses from the drop in Pimco Foreign's long position.| Pimco Capital vs. Cohen Steers Prfrd | Pimco Capital vs. Cohen Steers Preferd | Pimco Capital vs. Cohen Steers Prefrd | Pimco Capital vs. Cohen Steers Preferred |
| Pimco Foreign vs. Pimco Rae Worldwide | Pimco Foreign vs. Pimco Realestaterealreturn Strategy | Pimco Foreign vs. Pimco Funds | Pimco Foreign 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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