Correlation Between Palmer Square and Pimco Short
Can any of the company-specific risk be diversified away by investing in both Palmer Square and Pimco Short 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 Palmer Square and Pimco Short into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Palmer Square Ssi and Pimco Short Asset, you can compare the effects of market volatilities on Palmer Square and Pimco Short 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 Palmer Square with a short position of Pimco Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of Palmer Square and Pimco Short.
Diversification Opportunities for Palmer Square and Pimco Short
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Palmer and Pimco is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Palmer Square Ssi and Pimco Short Asset in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco Short Asset and Palmer Square 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 Palmer Square Ssi are associated (or correlated) with Pimco Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco Short Asset has no effect on the direction of Palmer Square i.e., Palmer Square and Pimco Short go up and down completely randomly.
Pair Corralation between Palmer Square and Pimco Short
Assuming the 90 days horizon Palmer Square Ssi is expected to generate 0.91 times more return on investment than Pimco Short. However, Palmer Square Ssi is 1.1 times less risky than Pimco Short. It trades about 0.41 of its potential returns per unit of risk. Pimco Short Asset is currently generating about 0.23 per unit of risk. If you would invest 881.00 in Palmer Square Ssi on August 28, 2024 and sell it today you would earn a total of 119.00 from holding Palmer Square Ssi or generate 13.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.72% |
| Values | Daily Returns |
Palmer Square Ssi vs. Pimco Short Asset
Performance |
| Timeline |
| Palmer Square Ssi |
| Pimco Short Asset |
Palmer Square and Pimco Short Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Palmer Square and Pimco Short
The main advantage of trading using opposite Palmer Square and Pimco Short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Palmer Square position performs unexpectedly, Pimco Short 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 Short will offset losses from the drop in Pimco Short's long position.| Palmer Square vs. Pimco Short Asset | Palmer Square vs. Doubleline Low Duration | Palmer Square vs. Dfa One Year Fixed | Palmer Square vs. Short Term Income Fund |
| Pimco Short vs. Pimco Rae Worldwide | Pimco Short vs. Pimco Rae Worldwide | Pimco Short vs. Pimco Rae Worldwide | Pimco Short vs. Pimco Rae Worldwide |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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