Correlation Between Pimco Total and Leader Total
Can any of the company-specific risk be diversified away by investing in both Pimco Total and Leader Total 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 Leader Total 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 Leader Total Return, you can compare the effects of market volatilities on Pimco Total and Leader Total 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 Leader Total. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco Total and Leader Total.
Diversification Opportunities for Pimco Total and Leader Total
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Pimco and Leader is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Total Return and Leader Total Return in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leader Total Return 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 Leader Total. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leader Total Return has no effect on the direction of Pimco Total i.e., Pimco Total and Leader Total go up and down completely randomly.
Pair Corralation between Pimco Total and Leader Total
Assuming the 90 days horizon Pimco Total Return is expected to generate 3.01 times more return on investment than Leader Total. However, Pimco Total is 3.01 times more volatile than Leader Total Return. It trades about 0.09 of its potential returns per unit of risk. Leader Total Return is currently generating about 0.17 per unit of risk. If you would invest 856.00 in Pimco Total Return on August 29, 2024 and sell it today you would earn a total of 6.00 from holding Pimco Total Return or generate 0.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pimco Total Return vs. Leader Total Return
Performance |
| Timeline |
| Pimco Total Return |
| Leader Total Return |
Pimco Total and Leader Total Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pimco Total and Leader Total
The main advantage of trading using opposite Pimco Total and Leader Total positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco Total position performs unexpectedly, Leader Total 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 Leader Total will offset losses from the drop in Leader Total's long position.| Pimco Total vs. Pimco High Yield | Pimco Total vs. Gmo High Yield | Pimco Total vs. Ppm High Yield | Pimco Total vs. Pia High Yield |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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