Correlation Between Pimco International and Pimco Preferred
Can any of the company-specific risk be diversified away by investing in both Pimco International and Pimco Preferred 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 Preferred 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 Preferred And, you can compare the effects of market volatilities on Pimco International and Pimco Preferred 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 Preferred. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco International and Pimco Preferred.
Diversification Opportunities for Pimco International and Pimco Preferred
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Pimco and Pimco is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Pimco International Stocksplus and Pimco Preferred And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco Preferred And 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 Preferred. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco Preferred And has no effect on the direction of Pimco International i.e., Pimco International and Pimco Preferred go up and down completely randomly.
Pair Corralation between Pimco International and Pimco Preferred
Assuming the 90 days horizon Pimco International Stocksplus is expected to generate 3.84 times more return on investment than Pimco Preferred. However, Pimco International is 3.84 times more volatile than Pimco Preferred And. It trades about 0.11 of its potential returns per unit of risk. Pimco Preferred And is currently generating about 0.16 per unit of risk. If you would invest 842.00 in Pimco International Stocksplus on September 1, 2024 and sell it today you would earn a total of 12.00 from holding Pimco International Stocksplus or generate 1.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pimco International Stocksplus vs. Pimco Preferred And
Performance |
| Timeline |
| Pimco International |
| Pimco Preferred And |
Pimco International and Pimco Preferred Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pimco International and Pimco Preferred
The main advantage of trading using opposite Pimco International and Pimco Preferred positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco International position performs unexpectedly, Pimco Preferred 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 Preferred will offset losses from the drop in Pimco Preferred's long position.| Pimco International vs. Pimco Rae Worldwide | Pimco International vs. Pimco Rae Worldwide | Pimco International vs. Pimco Rae Worldwide | Pimco International vs. Pimco Rae Worldwide |
| Pimco Preferred vs. Nuveen Preferred Securities | Pimco Preferred vs. Cohen Steers Preferd | Pimco Preferred vs. Pimco Income Fund | Pimco Preferred vs. Pimco Floating Income |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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