Correlation Between Short Term and Pimco Extended
Can any of the company-specific risk be diversified away by investing in both Short Term and Pimco Extended 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 Short Term and Pimco Extended into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Short Term Fund C and Pimco Extended Duration, you can compare the effects of market volatilities on Short Term and Pimco Extended 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 Short Term with a short position of Pimco Extended. Check out your portfolio center. Please also check ongoing floating volatility patterns of Short Term and Pimco Extended.
Diversification Opportunities for Short Term and Pimco Extended
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Short and Pimco is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Short Term Fund C and Pimco Extended Duration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco Extended Duration and Short Term 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 Short Term Fund C are associated (or correlated) with Pimco Extended. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco Extended Duration has no effect on the direction of Short Term i.e., Short Term and Pimco Extended go up and down completely randomly.
Pair Corralation between Short Term and Pimco Extended
Assuming the 90 days horizon Short Term is expected to generate 26.31 times less return on investment than Pimco Extended. But when comparing it to its historical volatility, Short Term Fund C is 33.11 times less risky than Pimco Extended. It trades about 0.1 of its potential returns per unit of risk. Pimco Extended Duration is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,367 in Pimco Extended Duration on September 1, 2024 and sell it today you would earn a total of 35.00 from holding Pimco Extended Duration or generate 2.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Short Term Fund C vs. Pimco Extended Duration
Performance |
| Timeline |
| Short Term Fund |
| Pimco Extended Duration |
Short Term and Pimco Extended Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Short Term and Pimco Extended
The main advantage of trading using opposite Short Term and Pimco Extended positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Short Term position performs unexpectedly, Pimco Extended 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 Extended will offset losses from the drop in Pimco Extended's long position.| Short Term vs. Angel Oak Multi Strategy | Short Term vs. Doubleline Emerging Markets | Short Term vs. Rbc Emerging Markets | Short Term vs. Siit Emerging Markets |
| Pimco Extended vs. Lgm Risk Managed | Pimco Extended vs. Siit High Yield | Pimco Extended vs. Strategic Allocation Aggressive | Pimco Extended vs. Pioneer High Yield |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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