Correlation Between Investment Grade and Pimco All
Can any of the company-specific risk be diversified away by investing in both Investment Grade and Pimco All 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 Investment Grade and Pimco All into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Investment Grade Porate and Pimco All Asset, you can compare the effects of market volatilities on Investment Grade and Pimco All 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 Investment Grade with a short position of Pimco All. Check out your portfolio center. Please also check ongoing floating volatility patterns of Investment Grade and Pimco All.
Diversification Opportunities for Investment Grade and Pimco All
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Investment and Pimco is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Investment Grade Porate and Pimco All Asset in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco All Asset and Investment Grade 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 Investment Grade Porate are associated (or correlated) with Pimco All. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco All Asset has no effect on the direction of Investment Grade i.e., Investment Grade and Pimco All go up and down completely randomly.
Pair Corralation between Investment Grade and Pimco All
Assuming the 90 days horizon Investment Grade is expected to generate 1.32 times less return on investment than Pimco All. In addition to that, Investment Grade is 1.05 times more volatile than Pimco All Asset. It trades about 0.05 of its total potential returns per unit of risk. Pimco All Asset is currently generating about 0.06 per unit of volatility. If you would invest 996.00 in Pimco All Asset on August 24, 2024 and sell it today you would earn a total of 129.00 from holding Pimco All Asset or generate 12.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.8% |
| Values | Daily Returns |
Investment Grade Porate vs. Pimco All Asset
Performance |
| Timeline |
| Investment Grade Porate |
| Pimco All Asset |
Investment Grade and Pimco All Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Investment Grade and Pimco All
The main advantage of trading using opposite Investment Grade and Pimco All positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Investment Grade position performs unexpectedly, Pimco All 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 All will offset losses from the drop in Pimco All's long position.| Investment Grade vs. Small Cap Equity | Investment Grade vs. Locorr Dynamic Equity | Investment Grade vs. Gmo Global Equity | Investment Grade vs. Scharf Fund Retail |
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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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