Correlation Between DBX ETF and PIMCO RAFI
Can any of the company-specific risk be diversified away by investing in both DBX ETF and PIMCO RAFI 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 DBX ETF and PIMCO RAFI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DBX ETF Trust and PIMCO RAFI ESG, you can compare the effects of market volatilities on DBX ETF and PIMCO RAFI 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 DBX ETF with a short position of PIMCO RAFI. Check out your portfolio center. Please also check ongoing floating volatility patterns of DBX ETF and PIMCO RAFI.
Diversification Opportunities for DBX ETF and PIMCO RAFI
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between DBX and PIMCO is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding DBX ETF Trust and PIMCO RAFI ESG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PIMCO RAFI ESG and DBX ETF 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 DBX ETF Trust are associated (or correlated) with PIMCO RAFI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PIMCO RAFI ESG has no effect on the direction of DBX ETF i.e., DBX ETF and PIMCO RAFI go up and down completely randomly.
Pair Corralation between DBX ETF and PIMCO RAFI
Given the investment horizon of 90 days DBX ETF Trust is expected to generate 0.94 times more return on investment than PIMCO RAFI. However, DBX ETF Trust is 1.07 times less risky than PIMCO RAFI. It trades about 0.11 of its potential returns per unit of risk. PIMCO RAFI ESG is currently generating about 0.08 per unit of risk. If you would invest 4,569 in DBX ETF Trust on November 3, 2024 and sell it today you would earn a total of 870.00 from holding DBX ETF Trust or generate 19.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
DBX ETF Trust vs. PIMCO RAFI ESG
Performance |
| Timeline |
| DBX ETF Trust |
| PIMCO RAFI ESG |
DBX ETF and PIMCO RAFI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DBX ETF and PIMCO RAFI
The main advantage of trading using opposite DBX ETF and PIMCO RAFI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DBX ETF position performs unexpectedly, PIMCO RAFI 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 RAFI will offset losses from the drop in PIMCO RAFI's long position.| DBX ETF vs. SPDR MSCI USA | DBX ETF vs. American Century STOXX | DBX ETF vs. Hartford Multifactor Equity | DBX ETF vs. PIMCO RAFI Dynamic |
| PIMCO RAFI vs. IQ Candriam ESG | PIMCO RAFI vs. Nuveen ESG Large Cap | PIMCO RAFI vs. Xtrackers MSCI EAFE | PIMCO RAFI vs. Xtrackers SP 500 |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
Other Complementary Tools
| Stocks Directory Find actively traded stocks across global markets | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators |