Correlation Between Pimco Emerging and Pimco Stocksplus
Can any of the company-specific risk be diversified away by investing in both Pimco Emerging and Pimco Stocksplus 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 Emerging and Pimco Stocksplus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pimco Emerging Markets and Pimco Stocksplus Long, you can compare the effects of market volatilities on Pimco Emerging and Pimco Stocksplus 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 Emerging with a short position of Pimco Stocksplus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco Emerging and Pimco Stocksplus.
Diversification Opportunities for Pimco Emerging and Pimco Stocksplus
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Pimco and Pimco is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Emerging Markets and Pimco Stocksplus Long in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco Stocksplus Long and Pimco Emerging 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 Emerging Markets are associated (or correlated) with Pimco Stocksplus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco Stocksplus Long has no effect on the direction of Pimco Emerging i.e., Pimco Emerging and Pimco Stocksplus go up and down completely randomly.
Pair Corralation between Pimco Emerging and Pimco Stocksplus
Assuming the 90 days horizon Pimco Emerging Markets is expected to under-perform the Pimco Stocksplus. But the mutual fund apears to be less risky and, when comparing its historical volatility, Pimco Emerging Markets is 2.93 times less risky than Pimco Stocksplus. The mutual fund trades about -0.02 of its potential returns per unit of risk. The Pimco Stocksplus Long is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,718 in Pimco Stocksplus Long on August 28, 2024 and sell it today you would earn a total of 70.00 from holding Pimco Stocksplus Long or generate 4.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pimco Emerging Markets vs. Pimco Stocksplus Long
Performance |
| Timeline |
| Pimco Emerging Markets |
| Pimco Stocksplus Long |
Pimco Emerging and Pimco Stocksplus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pimco Emerging and Pimco Stocksplus
The main advantage of trading using opposite Pimco Emerging and Pimco Stocksplus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco Emerging position performs unexpectedly, Pimco Stocksplus 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 Stocksplus will offset losses from the drop in Pimco Stocksplus' long position.| Pimco Emerging vs. Pimco Rae Worldwide | Pimco Emerging vs. Pimco Realestaterealreturn Strategy | Pimco Emerging vs. Pimco Rae Worldwide | Pimco Emerging vs. Pimco Rae Worldwide |
| Pimco Stocksplus vs. WisdomTree 9060 Balanced | Pimco Stocksplus vs. American Beacon Global | Pimco Stocksplus vs. Pimco Small Cap | Pimco Stocksplus vs. Pimco International Stocksplus |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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