Correlation Between Pimco New and NXG NextGen
Can any of the company-specific risk be diversified away by investing in both Pimco New and NXG NextGen 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 New and NXG NextGen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pimco New York and NXG NextGen Infrastructure, you can compare the effects of market volatilities on Pimco New and NXG NextGen 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 New with a short position of NXG NextGen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco New and NXG NextGen.
Diversification Opportunities for Pimco New and NXG NextGen
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Pimco and NXG is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Pimco New York and NXG NextGen Infrastructure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NXG NextGen Infrastr and Pimco New 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 New York are associated (or correlated) with NXG NextGen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NXG NextGen Infrastr has no effect on the direction of Pimco New i.e., Pimco New and NXG NextGen go up and down completely randomly.
Pair Corralation between Pimco New and NXG NextGen
Considering the 90-day investment horizon Pimco New is expected to generate 87.63 times less return on investment than NXG NextGen. But when comparing it to its historical volatility, Pimco New York is 1.69 times less risky than NXG NextGen. It trades about 0.01 of its potential returns per unit of risk. NXG NextGen Infrastructure is currently generating about 0.75 of returns per unit of risk over similar time horizon. If you would invest 4,270 in NXG NextGen Infrastructure on August 30, 2024 and sell it today you would earn a total of 870.00 from holding NXG NextGen Infrastructure or generate 20.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pimco New York vs. NXG NextGen Infrastructure
Performance |
| Timeline |
| Pimco New York |
| NXG NextGen Infrastr |
Pimco New and NXG NextGen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pimco New and NXG NextGen
The main advantage of trading using opposite Pimco New and NXG NextGen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco New position performs unexpectedly, NXG NextGen 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 NXG NextGen will offset losses from the drop in NXG NextGen's long position.| Pimco New vs. Eaton Vance National | Pimco New vs. Invesco High Income | Pimco New vs. Nuveen California Select | Pimco New vs. MFS Investment Grade |
| NXG NextGen vs. MFS Investment Grade | NXG NextGen vs. Invesco High Income | NXG NextGen vs. Eaton Vance National | NXG NextGen vs. Nuveen California Select |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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