Correlation Between Inverse Government and Pimco Global
Can any of the company-specific risk be diversified away by investing in both Inverse Government and Pimco Global 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 Inverse Government and Pimco Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Inverse Government Long and Pimco Global Multi Asset, you can compare the effects of market volatilities on Inverse Government and Pimco Global 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 Inverse Government with a short position of Pimco Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inverse Government and Pimco Global.
Diversification Opportunities for Inverse Government and Pimco Global
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Inverse and Pimco is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Inverse Government Long and Pimco Global Multi Asset in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco Global Multi and Inverse Government 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 Inverse Government Long are associated (or correlated) with Pimco Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco Global Multi has no effect on the direction of Inverse Government i.e., Inverse Government and Pimco Global go up and down completely randomly.
Pair Corralation between Inverse Government and Pimco Global
Assuming the 90 days horizon Inverse Government is expected to generate 1.03 times less return on investment than Pimco Global. In addition to that, Inverse Government is 2.08 times more volatile than Pimco Global Multi Asset. It trades about 0.04 of its total potential returns per unit of risk. Pimco Global Multi Asset is currently generating about 0.09 per unit of volatility. If you would invest 1,177 in Pimco Global Multi Asset on October 9, 2024 and sell it today you would earn a total of 302.00 from holding Pimco Global Multi Asset or generate 25.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Inverse Government Long vs. Pimco Global Multi Asset
Performance |
| Timeline |
| Inverse Government Long |
| Pimco Global Multi |
Inverse Government and Pimco Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inverse Government and Pimco Global
The main advantage of trading using opposite Inverse Government and Pimco Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inverse Government position performs unexpectedly, Pimco Global 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 Global will offset losses from the drop in Pimco Global's long position.| Inverse Government vs. Basic Materials Fund | Inverse Government vs. Basic Materials Fund | Inverse Government vs. Banking Fund Class | Inverse Government vs. Sp Midcap 400 |
| Pimco Global vs. Pimco Rae Worldwide | Pimco Global vs. Pimco Rae Worldwide | Pimco Global vs. Pimco Rae Worldwide | Pimco Global 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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