Correlation Between Pimco New and Pimco Rae
Can any of the company-specific risk be diversified away by investing in both Pimco New and Pimco Rae 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 New and Pimco Rae into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pimco New York and Pimco Rae Worldwide, you can compare the effects of market volatilities on Pimco New and Pimco Rae 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 New with a short position of Pimco Rae. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco New and Pimco Rae.
Diversification Opportunities for Pimco New and Pimco Rae
Weak diversification
The 3 months correlation between Pimco and Pimco is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Pimco New York and Pimco Rae Worldwide in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco Rae Worldwide and Pimco New 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 New York are associated (or correlated) with Pimco Rae. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco Rae Worldwide has no effect on the direction of Pimco New i.e., Pimco New and Pimco Rae go up and down completely randomly.
Pair Corralation between Pimco New and Pimco Rae
Assuming the 90 days horizon Pimco New York is expected to generate 1.02 times more return on investment than Pimco Rae. However, Pimco New is 1.02 times more volatile than Pimco Rae Worldwide. It trades about 0.15 of its potential returns per unit of risk. Pimco Rae Worldwide is currently generating about 0.08 per unit of risk. If you would invest 1,079 in Pimco New York on August 28, 2024 and sell it today you would earn a total of 10.00 from holding Pimco New York or generate 0.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pimco New York vs. Pimco Rae Worldwide
Performance |
| Timeline |
| Pimco New York |
| Pimco Rae Worldwide |
Pimco New and Pimco Rae Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pimco New and Pimco Rae
The main advantage of trading using opposite Pimco New and Pimco Rae positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco New position performs unexpectedly, Pimco Rae 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 Rae will offset losses from the drop in Pimco Rae's long position.| Pimco New vs. Pimco High Yield | Pimco New vs. Municipal Bond Fund | Pimco New vs. Pimco Floating Income | Pimco New vs. Investment Grade Porate |
| Pimco Rae vs. Fidelity Advisor Health | Pimco Rae vs. Tekla Healthcare Opportunities | Pimco Rae vs. Allianzgi Health Sciences | Pimco Rae vs. Health Biotchnology Portfolio |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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