Correlation Between Pimco Long and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Pimco Long and Dow Jones 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 Long and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pimco Long Duration and Dow Jones Industrial, you can compare the effects of market volatilities on Pimco Long and Dow Jones 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 Long with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco Long and Dow Jones.
Diversification Opportunities for Pimco Long and Dow Jones
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Pimco and Dow is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Long Duration and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial and Pimco Long 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 Long Duration are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Pimco Long i.e., Pimco Long and Dow Jones go up and down completely randomly.
Pair Corralation between Pimco Long and Dow Jones
Assuming the 90 days horizon Pimco Long is expected to generate 10.4 times less return on investment than Dow Jones. In addition to that, Pimco Long is 1.12 times more volatile than Dow Jones Industrial. It trades about 0.01 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.08 per unit of volatility. If you would invest 3,424,593 in Dow Jones Industrial on November 2, 2024 and sell it today you would earn a total of 1,063,620 from holding Dow Jones Industrial or generate 31.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Pimco Long Duration vs. Dow Jones Industrial
Performance |
| Timeline |
Pimco Long and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Pimco Long Duration
Pair trading matchups for Pimco Long
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Pimco Long and Dow Jones
The main advantage of trading using opposite Pimco Long and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco Long position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| Pimco Long vs. Jpmorgan Ultra Short Municipal | Pimco Long vs. Blrc Sgy Mnp | Pimco Long vs. Franklin Adjustable Government | Pimco Long vs. Lind Capital Partners |
| Dow Jones vs. Cincinnati Financial | Dow Jones vs. Kellanova | Dow Jones vs. Acme United | Dow Jones vs. Procter Gamble |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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