Correlation Between Nasdaq 100 and Pimco Low
Can any of the company-specific risk be diversified away by investing in both Nasdaq 100 and Pimco Low 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 Nasdaq 100 and Pimco Low into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nasdaq 100 2x Strategy and Pimco Low Duration, you can compare the effects of market volatilities on Nasdaq 100 and Pimco Low 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 Nasdaq 100 with a short position of Pimco Low. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq 100 and Pimco Low.
Diversification Opportunities for Nasdaq 100 and Pimco Low
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Nasdaq and Pimco is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq 100 2x Strategy and Pimco Low Duration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco Low Duration and Nasdaq 100 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 Nasdaq 100 2x Strategy are associated (or correlated) with Pimco Low. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco Low Duration has no effect on the direction of Nasdaq 100 i.e., Nasdaq 100 and Pimco Low go up and down completely randomly.
Pair Corralation between Nasdaq 100 and Pimco Low
Assuming the 90 days horizon Nasdaq 100 2x Strategy is expected to under-perform the Pimco Low. In addition to that, Nasdaq 100 is 12.87 times more volatile than Pimco Low Duration. It trades about -0.02 of its total potential returns per unit of risk. Pimco Low Duration is currently generating about 0.22 per unit of volatility. If you would invest 798.00 in Pimco Low Duration on October 22, 2024 and sell it today you would earn a total of 6.00 from holding Pimco Low Duration or generate 0.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nasdaq 100 2x Strategy vs. Pimco Low Duration
Performance |
| Timeline |
| Nasdaq 100 2x |
| Pimco Low Duration |
Nasdaq 100 and Pimco Low Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nasdaq 100 and Pimco Low
The main advantage of trading using opposite Nasdaq 100 and Pimco Low positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nasdaq 100 position performs unexpectedly, Pimco Low 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 Low will offset losses from the drop in Pimco Low's long position.| Nasdaq 100 vs. American Century Etf | Nasdaq 100 vs. Queens Road Small | Nasdaq 100 vs. Fpa Queens Road | Nasdaq 100 vs. Applied Finance Explorer |
| Pimco Low vs. Transamerica Funds | Pimco Low vs. Ashmore Emerging Markets | Pimco Low vs. Jpmorgan Trust Iv | Pimco Low vs. Fidelity Government Money |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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