Correlation Between Us Treasury and Pimco Extended
Can any of the company-specific risk be diversified away by investing in both Us Treasury and Pimco Extended 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 Us Treasury and Pimco Extended into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Us Treasury Long Term and Pimco Extended Duration, you can compare the effects of market volatilities on Us Treasury and Pimco Extended 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 Us Treasury with a short position of Pimco Extended. Check out your portfolio center. Please also check ongoing floating volatility patterns of Us Treasury and Pimco Extended.
Diversification Opportunities for Us Treasury and Pimco Extended
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between PRUUX and Pimco is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Us Treasury Long Term and Pimco Extended Duration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco Extended Duration and Us Treasury 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 Us Treasury Long Term are associated (or correlated) with Pimco Extended. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco Extended Duration has no effect on the direction of Us Treasury i.e., Us Treasury and Pimco Extended go up and down completely randomly.
Pair Corralation between Us Treasury and Pimco Extended
Assuming the 90 days horizon Us Treasury is expected to generate 1.8 times less return on investment than Pimco Extended. But when comparing it to its historical volatility, Us Treasury Long Term is 1.64 times less risky than Pimco Extended. It trades about 0.09 of its potential returns per unit of risk. Pimco Extended Duration is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,368 in Pimco Extended Duration on September 4, 2024 and sell it today you would earn a total of 41.00 from holding Pimco Extended Duration or generate 3.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.24% |
| Values | Daily Returns |
Us Treasury Long Term vs. Pimco Extended Duration
Performance |
| Timeline |
| Us Treasury Long |
| Pimco Extended Duration |
Us Treasury and Pimco Extended Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Us Treasury and Pimco Extended
The main advantage of trading using opposite Us Treasury and Pimco Extended positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Us Treasury position performs unexpectedly, Pimco Extended 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 Extended will offset losses from the drop in Pimco Extended's long position.| Us Treasury vs. T Rowe Price | Us Treasury vs. T Rowe Price | Us Treasury vs. T Rowe Price | Us Treasury vs. T Rowe Price |
| Pimco Extended vs. Virtus Dfa 2040 | Pimco Extended vs. T Rowe Price | Pimco Extended vs. Franklin Lifesmart 2050 | Pimco Extended vs. T Rowe Price |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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