Correlation Between Pimco International and Pimco Short
Can any of the company-specific risk be diversified away by investing in both Pimco International and Pimco Short 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 International and Pimco Short into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pimco International Stocksplus and Pimco Short Asset, you can compare the effects of market volatilities on Pimco International and Pimco Short 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 International with a short position of Pimco Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco International and Pimco Short.
Diversification Opportunities for Pimco International and Pimco Short
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Pimco and Pimco is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Pimco International Stocksplus and Pimco Short Asset in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco Short Asset and Pimco International 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 International Stocksplus are associated (or correlated) with Pimco Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco Short Asset has no effect on the direction of Pimco International i.e., Pimco International and Pimco Short go up and down completely randomly.
Pair Corralation between Pimco International and Pimco Short
Assuming the 90 days horizon Pimco International is expected to generate 1.03 times less return on investment than Pimco Short. In addition to that, Pimco International is 6.53 times more volatile than Pimco Short Asset. It trades about 0.03 of its total potential returns per unit of risk. Pimco Short Asset is currently generating about 0.19 per unit of volatility. If you would invest 991.00 in Pimco Short Asset on August 31, 2024 and sell it today you would earn a total of 4.00 from holding Pimco Short Asset or generate 0.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pimco International Stocksplus vs. Pimco Short Asset
Performance |
| Timeline |
| Pimco International |
| Pimco Short Asset |
Pimco International and Pimco Short Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pimco International and Pimco Short
The main advantage of trading using opposite Pimco International and Pimco Short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco International position performs unexpectedly, Pimco Short 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 Short will offset losses from the drop in Pimco Short's long position.| Pimco International vs. Pimco Small Cap | Pimco International vs. Fundamental Indexplus Tr | Pimco International vs. Stocksplus Total Return | Pimco International vs. Allianzgi Nfj Mid Cap |
| Pimco Short vs. Pimco Funds | Pimco Short vs. Pimco Rae Worldwide | Pimco Short vs. Pimco New York | Pimco Short vs. Pimco New York |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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