Correlation Between Pimco Rae and Pimco International
Can any of the company-specific risk be diversified away by investing in both Pimco Rae and Pimco International 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 Rae and Pimco International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pimco Rae Worldwide and Pimco International Bond, you can compare the effects of market volatilities on Pimco Rae and Pimco International 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 Rae with a short position of Pimco International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco Rae and Pimco International.
Diversification Opportunities for Pimco Rae and Pimco International
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Pimco and Pimco is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Rae Worldwide and Pimco International Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco International Bond and Pimco Rae 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 Rae Worldwide are associated (or correlated) with Pimco International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco International Bond has no effect on the direction of Pimco Rae i.e., Pimco Rae and Pimco International go up and down completely randomly.
Pair Corralation between Pimco Rae and Pimco International
Assuming the 90 days horizon Pimco Rae Worldwide is expected to generate 0.72 times more return on investment than Pimco International. However, Pimco Rae Worldwide is 1.38 times less risky than Pimco International. It trades about 0.14 of its potential returns per unit of risk. Pimco International Bond is currently generating about -0.14 per unit of risk. If you would invest 810.00 in Pimco Rae Worldwide on August 27, 2024 and sell it today you would earn a total of 8.00 from holding Pimco Rae Worldwide or generate 0.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pimco Rae Worldwide vs. Pimco International Bond
Performance |
| Timeline |
| Pimco Rae Worldwide |
| Pimco International Bond |
Pimco Rae and Pimco International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pimco Rae and Pimco International
The main advantage of trading using opposite Pimco Rae and Pimco International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco Rae position performs unexpectedly, Pimco International 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 International will offset losses from the drop in Pimco International's long position.| Pimco Rae vs. Icon Financial Fund | Pimco Rae vs. Financials Ultrasector Profund | Pimco Rae vs. Royce Global Financial | Pimco Rae vs. Davis Financial Fund |
| Pimco International vs. Pimco Rae Worldwide | Pimco International vs. Pimco Rae Worldwide | Pimco International vs. Pimco Rae Worldwide | Pimco International 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas |