Correlation Between Pimco International and Pimco Rae
Can any of the company-specific risk be diversified away by investing in both Pimco International and Pimco Rae 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 International and Pimco Rae into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pimco International Bond and Pimco Rae Fundamental, you can compare the effects of market volatilities on Pimco International and Pimco Rae 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 International with a short position of Pimco Rae. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco International and Pimco Rae.
Diversification Opportunities for Pimco International and Pimco Rae
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Pimco and Pimco is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Pimco International Bond and Pimco Rae Fundamental in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco Rae Fundamental and Pimco International 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 International Bond are associated (or correlated) with Pimco Rae. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco Rae Fundamental has no effect on the direction of Pimco International i.e., Pimco International and Pimco Rae go up and down completely randomly.
Pair Corralation between Pimco International and Pimco Rae
Assuming the 90 days horizon Pimco International Bond is expected to generate 0.59 times more return on investment than Pimco Rae. However, Pimco International Bond is 1.7 times less risky than Pimco Rae. It trades about 0.05 of its potential returns per unit of risk. Pimco Rae Fundamental is currently generating about -0.08 per unit of risk. If you would invest 736.00 in Pimco International Bond on October 24, 2024 and sell it today you would earn a total of 3.00 from holding Pimco International Bond or generate 0.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pimco International Bond vs. Pimco Rae Fundamental
Performance |
| Timeline |
| Pimco International Bond |
| Pimco Rae Fundamental |
Pimco International and Pimco Rae Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pimco International and Pimco Rae
The main advantage of trading using opposite Pimco International and Pimco Rae positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco International position performs unexpectedly, Pimco Rae 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 Rae will offset losses from the drop in Pimco Rae's long position.| Pimco International vs. Blackrock Health Sciences | Pimco International vs. Fidelity Advisor Health | Pimco International vs. Allianzgi Health Sciences | Pimco International vs. Tekla Healthcare Investors |
| Pimco Rae vs. Ab Municipal Bond | Pimco Rae vs. Inverse Government Long | Pimco Rae vs. Alpine Ultra Short | Pimco Rae vs. Ab Municipal Bond |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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