Correlation Between Pimco Total and Brandes E
Can any of the company-specific risk be diversified away by investing in both Pimco Total and Brandes E 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 Total and Brandes E into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pimco Total Return and Brandes E Plus, you can compare the effects of market volatilities on Pimco Total and Brandes E 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 Total with a short position of Brandes E. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco Total and Brandes E.
Diversification Opportunities for Pimco Total and Brandes E
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Pimco and Brandes is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Total Return and Brandes E Plus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brandes E Plus and Pimco Total 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 Total Return are associated (or correlated) with Brandes E. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brandes E Plus has no effect on the direction of Pimco Total i.e., Pimco Total and Brandes E go up and down completely randomly.
Pair Corralation between Pimco Total and Brandes E
Assuming the 90 days horizon Pimco Total Return is expected to generate 1.19 times more return on investment than Brandes E. However, Pimco Total is 1.19 times more volatile than Brandes E Plus. It trades about 0.04 of its potential returns per unit of risk. Brandes E Plus is currently generating about 0.05 per unit of risk. If you would invest 792.00 in Pimco Total Return on August 30, 2024 and sell it today you would earn a total of 71.00 from holding Pimco Total Return or generate 8.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pimco Total Return vs. Brandes E Plus
Performance |
| Timeline |
| Pimco Total Return |
| Brandes E Plus |
Pimco Total and Brandes E Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pimco Total and Brandes E
The main advantage of trading using opposite Pimco Total and Brandes E positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco Total position performs unexpectedly, Brandes E 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 Brandes E will offset losses from the drop in Brandes E's long position.| Pimco Total vs. Ab Municipal Bond | Pimco Total vs. Aqr Managed Futures | Pimco Total vs. The Hartford Inflation | Pimco Total vs. The Hartford Inflation |
| Brandes E vs. Rationalpier 88 Convertible | Brandes E vs. Lord Abbett Convertible | Brandes E vs. Advent Claymore Convertible | Brandes E vs. Virtus Convertible |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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