Correlation Between Pimco Trends and Emerald Growth
Can any of the company-specific risk be diversified away by investing in both Pimco Trends and Emerald Growth 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 Emerald Growth 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 Emerald Growth Fund, you can compare the effects of market volatilities on Pimco Trends and Emerald Growth 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 Emerald Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco Trends and Emerald Growth.
Diversification Opportunities for Pimco Trends and Emerald Growth
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between PIMCO and Emerald is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Trends Managed and Emerald Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emerald Growth 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 Emerald Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emerald Growth has no effect on the direction of Pimco Trends i.e., Pimco Trends and Emerald Growth go up and down completely randomly.
Pair Corralation between Pimco Trends and Emerald Growth
Assuming the 90 days horizon Pimco Trends is expected to generate 6.31 times less return on investment than Emerald Growth. But when comparing it to its historical volatility, Pimco Trends Managed is 2.57 times less risky than Emerald Growth. It trades about 0.09 of its potential returns per unit of risk. Emerald Growth Fund is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 1,714 in Emerald Growth Fund on August 29, 2024 and sell it today you would earn a total of 147.00 from holding Emerald Growth Fund or generate 8.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pimco Trends Managed vs. Emerald Growth Fund
Performance |
| Timeline |
| Pimco Trends Managed |
| Emerald Growth |
Pimco Trends and Emerald Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pimco Trends and Emerald Growth
The main advantage of trading using opposite Pimco Trends and Emerald Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco Trends position performs unexpectedly, Emerald Growth 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 Emerald Growth will offset losses from the drop in Emerald Growth's long position.| Pimco Trends vs. Pimco Trends Managed | Pimco Trends vs. HUMANA INC | Pimco Trends vs. Aquagold International | Pimco Trends vs. Barloworld Ltd ADR |
| Emerald Growth vs. Emerald Growth Fund | Emerald Growth vs. Emerald Growth Fund | Emerald Growth vs. Emerald Banking And | Emerald Growth vs. Nuveen Small Cap |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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