Correlation Between Pimco Trends and Abbey Capital
Can any of the company-specific risk be diversified away by investing in both Pimco Trends and Abbey Capital 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 Trends and Abbey Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pimco Trends Managed and Abbey Capital Futures, you can compare the effects of market volatilities on Pimco Trends and Abbey Capital 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 Trends with a short position of Abbey Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco Trends and Abbey Capital.
Diversification Opportunities for Pimco Trends and Abbey Capital
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Pimco and Abbey is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Trends Managed and Abbey Capital Futures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Abbey Capital Futures and Pimco Trends 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 Trends Managed are associated (or correlated) with Abbey Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Abbey Capital Futures has no effect on the direction of Pimco Trends i.e., Pimco Trends and Abbey Capital go up and down completely randomly.
Pair Corralation between Pimco Trends and Abbey Capital
Assuming the 90 days horizon Pimco Trends Managed is expected to under-perform the Abbey Capital. In addition to that, Pimco Trends is 1.19 times more volatile than Abbey Capital Futures. It trades about -0.04 of its total potential returns per unit of risk. Abbey Capital Futures is currently generating about -0.01 per unit of volatility. If you would invest 1,126 in Abbey Capital Futures on October 25, 2024 and sell it today you would lose (21.00) from holding Abbey Capital Futures or give up 1.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pimco Trends Managed vs. Abbey Capital Futures
Performance |
| Timeline |
| Pimco Trends Managed |
| Abbey Capital Futures |
Pimco Trends and Abbey Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pimco Trends and Abbey Capital
The main advantage of trading using opposite Pimco Trends and Abbey Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco Trends position performs unexpectedly, Abbey Capital 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 Abbey Capital will offset losses from the drop in Abbey Capital's long position.| Pimco Trends vs. Asg Managed Futures | Pimco Trends vs. Asg Managed Futures | Pimco Trends vs. Aqr Managed Futures | Pimco Trends vs. iMGP DBi Managed |
| Abbey Capital vs. Gmo Global Equity | Abbey Capital vs. Gmo Global Equity | Abbey Capital vs. Locorr Dynamic Equity | Abbey Capital vs. Siit Equity Factor |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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