Correlation Between Pimco Global and State Street
Can any of the company-specific risk be diversified away by investing in both Pimco Global and State Street 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 State Street 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 State Street Equity, you can compare the effects of market volatilities on Pimco Global and State Street 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 State Street. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco Global and State Street.
Diversification Opportunities for Pimco Global and State Street
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Pimco and State is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Global Multi Asset and State Street Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on State Street 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 State Street. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of State Street Equity has no effect on the direction of Pimco Global i.e., Pimco Global and State Street go up and down completely randomly.
Pair Corralation between Pimco Global and State Street
Assuming the 90 days horizon Pimco Global is expected to generate 3.11 times less return on investment than State Street. But when comparing it to its historical volatility, Pimco Global Multi Asset is 2.0 times less risky than State Street. It trades about 0.24 of its potential returns per unit of risk. State Street Equity is currently generating about 0.37 of returns per unit of risk over similar time horizon. If you would invest 52,469 in State Street Equity on September 3, 2024 and sell it today you would earn a total of 3,001 from holding State Street Equity or generate 5.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pimco Global Multi Asset vs. State Street Equity
Performance |
| Timeline |
| Pimco Global Multi |
| State Street Equity |
Pimco Global and State Street Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pimco Global and State Street
The main advantage of trading using opposite Pimco Global and State Street positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco Global position performs unexpectedly, State Street 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 State Street will offset losses from the drop in State Street's long position.| Pimco Global vs. Scharf Global Opportunity | Pimco Global vs. Abr 7525 Volatility | Pimco Global vs. Bbh Intermediate Municipal | Pimco Global vs. T Rowe Price |
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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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