Correlation Between Pimco Global and Nuveen Santa
Can any of the company-specific risk be diversified away by investing in both Pimco Global and Nuveen Santa 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 Nuveen Santa 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 Nuveen Santa Barbara, you can compare the effects of market volatilities on Pimco Global and Nuveen Santa 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 Nuveen Santa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco Global and Nuveen Santa.
Diversification Opportunities for Pimco Global and Nuveen Santa
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Pimco and Nuveen is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Global Multi Asset and Nuveen Santa Barbara in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Santa Barbara 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 Nuveen Santa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Santa Barbara has no effect on the direction of Pimco Global i.e., Pimco Global and Nuveen Santa go up and down completely randomly.
Pair Corralation between Pimco Global and Nuveen Santa
Assuming the 90 days horizon Pimco Global is expected to generate 1.1 times less return on investment than Nuveen Santa. But when comparing it to its historical volatility, Pimco Global Multi Asset is 1.39 times less risky than Nuveen Santa. It trades about 0.12 of its potential returns per unit of risk. Nuveen Santa Barbara is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 4,983 in Nuveen Santa Barbara on September 14, 2024 and sell it today you would earn a total of 1,728 from holding Nuveen Santa Barbara or generate 34.68% 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. Nuveen Santa Barbara
Performance |
| Timeline |
| Pimco Global Multi |
| Nuveen Santa Barbara |
Pimco Global and Nuveen Santa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pimco Global and Nuveen Santa
The main advantage of trading using opposite Pimco Global and Nuveen Santa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco Global position performs unexpectedly, Nuveen Santa 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 Nuveen Santa will offset losses from the drop in Nuveen Santa'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 Rae Worldwide |
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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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