Correlation Between Pimco Trends and State Street
Can any of the company-specific risk be diversified away by investing in both Pimco Trends and State Street 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 State Street 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 State Street Hedged, you can compare the effects of market volatilities on Pimco Trends and State Street 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 State Street. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco Trends and State Street.
Diversification Opportunities for Pimco Trends and State Street
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Pimco and State is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Trends Managed and State Street Hedged in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on State Street Hedged 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 State Street. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of State Street Hedged has no effect on the direction of Pimco Trends i.e., Pimco Trends and State Street go up and down completely randomly.
Pair Corralation between Pimco Trends and State Street
Assuming the 90 days horizon Pimco Trends Managed is expected to under-perform the State Street. But the mutual fund apears to be less risky and, when comparing its historical volatility, Pimco Trends Managed is 1.31 times less risky than State Street. The mutual fund trades about -0.01 of its potential returns per unit of risk. The State Street Hedged is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 10,314 in State Street Hedged on September 1, 2024 and sell it today you would earn a total of 2,081 from holding State Street Hedged or generate 20.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.63% |
| Values | Daily Returns |
Pimco Trends Managed vs. State Street Hedged
Performance |
| Timeline |
| Pimco Trends Managed |
| State Street Hedged |
Pimco Trends and State Street Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pimco Trends and State Street
The main advantage of trading using opposite Pimco Trends and State Street positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco Trends position performs unexpectedly, State Street 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 State Street will offset losses from the drop in State Street'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 |
| State Street vs. State Street Target | State Street vs. State Street Target | State Street vs. Ssga International Stock | State Street vs. State Street Target |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
Other Complementary Tools
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas |