Correlation Between Pimco Global and Large Cap
Can any of the company-specific risk be diversified away by investing in both Pimco Global and Large Cap 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 Global and Large Cap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pimco Global Multi Asset and Large Cap Equity, you can compare the effects of market volatilities on Pimco Global and Large Cap 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 Global with a short position of Large Cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco Global and Large Cap.
Diversification Opportunities for Pimco Global and Large Cap
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Pimco and Large is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Global Multi Asset and Large Cap Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Large Cap Equity and Pimco Global 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 Global Multi Asset are associated (or correlated) with Large Cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Large Cap Equity has no effect on the direction of Pimco Global i.e., Pimco Global and Large Cap go up and down completely randomly.
Pair Corralation between Pimco Global and Large Cap
Assuming the 90 days horizon Pimco Global is expected to generate 1.62 times less return on investment than Large Cap. But when comparing it to its historical volatility, Pimco Global Multi Asset is 1.77 times less risky than Large Cap. It trades about 0.27 of its potential returns per unit of risk. Large Cap Equity is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 1,189 in Large Cap Equity on September 2, 2024 and sell it today you would earn a total of 41.00 from holding Large Cap Equity or generate 3.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pimco Global Multi Asset vs. Large Cap Equity
Performance |
| Timeline |
| Pimco Global Multi |
| Large Cap Equity |
Pimco Global and Large Cap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pimco Global and Large Cap
The main advantage of trading using opposite Pimco Global and Large Cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco Global position performs unexpectedly, Large Cap 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 Large Cap will offset losses from the drop in Large Cap's long position.| Pimco Global vs. Pimco Rae Worldwide | Pimco Global vs. Pimco Rae Worldwide | Pimco Global vs. Pimco Rae Worldwide | Pimco Global vs. Pimco Foreign Bond |
| Large Cap vs. Fidelity Select Semiconductors | Large Cap vs. Westwood Largecap Value | Large Cap vs. Russell 2000 2x | Large Cap vs. Federated Hermes Conservative |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
Other Complementary Tools
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Commodity Directory Find actively traded commodities issued by global exchanges |