Correlation Between Pimco Small and Pimco Stocksplus
Can any of the company-specific risk be diversified away by investing in both Pimco Small and Pimco Stocksplus 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 Small and Pimco Stocksplus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pimco Small Cap and Pimco Stocksplus Long, you can compare the effects of market volatilities on Pimco Small and Pimco Stocksplus 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 Small with a short position of Pimco Stocksplus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco Small and Pimco Stocksplus.
Diversification Opportunities for Pimco Small and Pimco Stocksplus
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Pimco and Pimco is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Small Cap and Pimco Stocksplus Long in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco Stocksplus Long and Pimco Small 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 Small Cap are associated (or correlated) with Pimco Stocksplus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco Stocksplus Long has no effect on the direction of Pimco Small i.e., Pimco Small and Pimco Stocksplus go up and down completely randomly.
Pair Corralation between Pimco Small and Pimco Stocksplus
Assuming the 90 days horizon Pimco Small Cap is expected to generate 1.22 times more return on investment than Pimco Stocksplus. However, Pimco Small is 1.22 times more volatile than Pimco Stocksplus Long. It trades about 0.09 of its potential returns per unit of risk. Pimco Stocksplus Long is currently generating about 0.09 per unit of risk. If you would invest 682.00 in Pimco Small Cap on August 28, 2024 and sell it today you would earn a total of 190.00 from holding Pimco Small Cap or generate 27.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pimco Small Cap vs. Pimco Stocksplus Long
Performance |
| Timeline |
| Pimco Small Cap |
| Pimco Stocksplus Long |
Pimco Small and Pimco Stocksplus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pimco Small and Pimco Stocksplus
The main advantage of trading using opposite Pimco Small and Pimco Stocksplus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco Small position performs unexpectedly, Pimco Stocksplus 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 Stocksplus will offset losses from the drop in Pimco Stocksplus' long position.| Pimco Small vs. Neuberger Berman Real | Pimco Small vs. Goldman Sachs Balanced | Pimco Small vs. Fundamental Indexplus Tr | Pimco Small vs. Pimco International Stocksplus |
| Pimco Stocksplus vs. WisdomTree 9060 Balanced | Pimco Stocksplus vs. Pimco Small Cap | Pimco Stocksplus vs. Pimco International Stocksplus | Pimco Stocksplus vs. Guggenheim Strategic Opportunities |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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