Correlation Between Global Bond and Pimco Energy
Can any of the company-specific risk be diversified away by investing in both Global Bond and Pimco Energy 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 Global Bond and Pimco Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Bond Fund and Pimco Energy Tactical, you can compare the effects of market volatilities on Global Bond and Pimco Energy 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 Global Bond with a short position of Pimco Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Bond and Pimco Energy.
Diversification Opportunities for Global Bond and Pimco Energy
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Global and Pimco is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Global Bond Fund and Pimco Energy Tactical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco Energy Tactical and Global Bond 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 Global Bond Fund are associated (or correlated) with Pimco Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco Energy Tactical has no effect on the direction of Global Bond i.e., Global Bond and Pimco Energy go up and down completely randomly.
Pair Corralation between Global Bond and Pimco Energy
Assuming the 90 days horizon Global Bond is expected to generate 7.27 times less return on investment than Pimco Energy. But when comparing it to its historical volatility, Global Bond Fund is 10.25 times less risky than Pimco Energy. It trades about 0.13 of its potential returns per unit of risk. Pimco Energy Tactical is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,782 in Pimco Energy Tactical on November 3, 2024 and sell it today you would earn a total of 830.00 from holding Pimco Energy Tactical or generate 46.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Bond Fund vs. Pimco Energy Tactical
Performance |
| Timeline |
| Global Bond Fund |
| Pimco Energy Tactical |
Global Bond and Pimco Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Bond and Pimco Energy
The main advantage of trading using opposite Global Bond and Pimco Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Bond position performs unexpectedly, Pimco Energy 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 Energy will offset losses from the drop in Pimco Energy's long position.| Global Bond vs. Absolute Convertible Arbitrage | Global Bond vs. Lord Abbett Convertible | Global Bond vs. Columbia Convertible Securities | Global Bond vs. Virtus Convertible |
| Pimco Energy vs. The Growth Equity | Pimco Energy vs. Aqr Equity Market | Pimco Energy vs. Gmo International Equity | Pimco Energy vs. Qs Global Equity |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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