Correlation Between Commodities Strategy and Pimco Energy
Can any of the company-specific risk be diversified away by investing in both Commodities Strategy and Pimco Energy 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 Commodities Strategy and Pimco Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Commodities Strategy Fund and Pimco Energy Tactical, you can compare the effects of market volatilities on Commodities Strategy and Pimco Energy 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 Commodities Strategy with a short position of Pimco Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Commodities Strategy and Pimco Energy.
Diversification Opportunities for Commodities Strategy and Pimco Energy
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Commodities and Pimco is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Commodities Strategy Fund and Pimco Energy Tactical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco Energy Tactical and Commodities Strategy 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 Commodities Strategy Fund are associated (or correlated) with Pimco Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco Energy Tactical has no effect on the direction of Commodities Strategy i.e., Commodities Strategy and Pimco Energy go up and down completely randomly.
Pair Corralation between Commodities Strategy and Pimco Energy
Assuming the 90 days horizon Commodities Strategy Fund is expected to generate 0.32 times more return on investment than Pimco Energy. However, Commodities Strategy Fund is 3.16 times less risky than Pimco Energy. It trades about 0.32 of its potential returns per unit of risk. Pimco Energy Tactical is currently generating about -0.01 per unit of risk. If you would invest 2,938 in Commodities Strategy Fund on October 11, 2024 and sell it today you would earn a total of 107.00 from holding Commodities Strategy Fund or generate 3.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Commodities Strategy Fund vs. Pimco Energy Tactical
Performance |
| Timeline |
| Commodities Strategy |
| Pimco Energy Tactical |
Commodities Strategy and Pimco Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Commodities Strategy and Pimco Energy
The main advantage of trading using opposite Commodities Strategy and Pimco Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Commodities Strategy position performs unexpectedly, Pimco Energy 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 Energy will offset losses from the drop in Pimco Energy's long position.| Commodities Strategy vs. Basic Materials Fund | Commodities Strategy vs. Energy Services Fund | Commodities Strategy vs. Energy Fund Investor | Commodities Strategy vs. Real Estate Fund |
| Pimco Energy vs. Nasdaq 100 Profund Nasdaq 100 | Pimco Energy vs. Alternative Asset Allocation | Pimco Energy vs. Issachar Fund Class | Pimco Energy vs. Rbb Fund |
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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