Correlation Between Pimco Global and Commonwealth Global
Can any of the company-specific risk be diversified away by investing in both Pimco Global and Commonwealth Global 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 Commonwealth Global 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 Commonwealth Global Fund, you can compare the effects of market volatilities on Pimco Global and Commonwealth Global 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 Commonwealth Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco Global and Commonwealth Global.
Diversification Opportunities for Pimco Global and Commonwealth Global
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Pimco and Commonwealth is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Global Multi Asset and Commonwealth Global Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Commonwealth Global 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 Commonwealth Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Commonwealth Global has no effect on the direction of Pimco Global i.e., Pimco Global and Commonwealth Global go up and down completely randomly.
Pair Corralation between Pimco Global and Commonwealth Global
Assuming the 90 days horizon Pimco Global Multi Asset is expected to generate 0.69 times more return on investment than Commonwealth Global. However, Pimco Global Multi Asset is 1.45 times less risky than Commonwealth Global. It trades about 0.11 of its potential returns per unit of risk. Commonwealth Global Fund is currently generating about 0.05 per unit of risk. If you would invest 1,227 in Pimco Global Multi Asset on September 12, 2024 and sell it today you would earn a total of 253.00 from holding Pimco Global Multi Asset or generate 20.62% 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. Commonwealth Global Fund
Performance |
| Timeline |
| Pimco Global Multi |
| Commonwealth Global |
Pimco Global and Commonwealth Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pimco Global and Commonwealth Global
The main advantage of trading using opposite Pimco Global and Commonwealth Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco Global position performs unexpectedly, Commonwealth Global 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 Commonwealth Global will offset losses from the drop in Commonwealth Global's long position.| Pimco Global vs. Siit Emerging Markets | Pimco Global vs. Ashmore Emerging Markets | Pimco Global vs. Aqr Long Short Equity | Pimco Global vs. Shelton Emerging Markets |
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.
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