Correlation Between PIMCO Short and PIMCO Sterling
Can any of the company-specific risk be diversified away by investing in both PIMCO Short and PIMCO Sterling 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 Short and PIMCO Sterling into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PIMCO Short Term High and PIMCO Sterling Short, you can compare the effects of market volatilities on PIMCO Short and PIMCO Sterling 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 Short with a short position of PIMCO Sterling. Check out your portfolio center. Please also check ongoing floating volatility patterns of PIMCO Short and PIMCO Sterling.
Diversification Opportunities for PIMCO Short and PIMCO Sterling
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between PIMCO and PIMCO is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding PIMCO Short Term High and PIMCO Sterling Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PIMCO Sterling Short and PIMCO Short 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 Short Term High are associated (or correlated) with PIMCO Sterling. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PIMCO Sterling Short has no effect on the direction of PIMCO Short i.e., PIMCO Short and PIMCO Sterling go up and down completely randomly.
Pair Corralation between PIMCO Short and PIMCO Sterling
Assuming the 90 days trading horizon PIMCO Short Term High is expected to generate 5.49 times more return on investment than PIMCO Sterling. However, PIMCO Short is 5.49 times more volatile than PIMCO Sterling Short. It trades about 0.28 of its potential returns per unit of risk. PIMCO Sterling Short is currently generating about 0.5 per unit of risk. If you would invest 889.00 in PIMCO Short Term High on September 2, 2024 and sell it today you would earn a total of 10.00 from holding PIMCO Short Term High or generate 1.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
PIMCO Short Term High vs. PIMCO Sterling Short
Performance |
| Timeline |
| PIMCO Short Term |
| PIMCO Sterling Short |
PIMCO Short and PIMCO Sterling Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PIMCO Short and PIMCO Sterling
The main advantage of trading using opposite PIMCO Short and PIMCO Sterling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PIMCO Short position performs unexpectedly, PIMCO Sterling 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 Sterling will offset losses from the drop in PIMCO Sterling's long position.| PIMCO Short vs. GraniteShares 3x Short | PIMCO Short vs. WisdomTree Natural Gas | PIMCO Short vs. Leverage Shares 3x | PIMCO Short vs. WisdomTree Natural Gas |
| PIMCO Sterling vs. PIMCO Dollar Short | PIMCO Sterling vs. PIMCO Low Duration | PIMCO Sterling vs. PIMCO ETFs plc | PIMCO Sterling vs. PIMCO Short Term High |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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