Correlation Between PIMCO Short and SP 500
Can any of the company-specific risk be diversified away by investing in both PIMCO Short and SP 500 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 SP 500 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 SP 500 VIX, you can compare the effects of market volatilities on PIMCO Short and SP 500 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 SP 500. Check out your portfolio center. Please also check ongoing floating volatility patterns of PIMCO Short and SP 500.
Diversification Opportunities for PIMCO Short and SP 500
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between PIMCO and VILX is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding PIMCO Short Term High and SP 500 VIX in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SP 500 VIX 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 SP 500. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SP 500 VIX has no effect on the direction of PIMCO Short i.e., PIMCO Short and SP 500 go up and down completely randomly.
Pair Corralation between PIMCO Short and SP 500
Assuming the 90 days trading horizon PIMCO Short Term High is expected to generate 3.37 times more return on investment than SP 500. However, PIMCO Short is 3.37 times more volatile than SP 500 VIX. It trades about 0.23 of its potential returns per unit of risk. SP 500 VIX is currently generating about -0.17 per unit of risk. If you would invest 387.00 in PIMCO Short Term High on October 21, 2024 and sell it today you would earn a total of 508.00 from holding PIMCO Short Term High or generate 131.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PIMCO Short Term High vs. SP 500 VIX
Performance |
| Timeline |
| PIMCO Short Term |
| SP 500 VIX |
PIMCO Short and SP 500 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PIMCO Short and SP 500
The main advantage of trading using opposite PIMCO Short and SP 500 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PIMCO Short position performs unexpectedly, SP 500 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 SP 500 will offset losses from the drop in SP 500's long position.| PIMCO Short vs. SP 500 VIX | PIMCO Short vs. WisdomTree Natural Gas | PIMCO Short vs. WisdomTree Natural Gas | PIMCO Short vs. Leverage Shares 2x |
| SP 500 vs. Leverage Shares 3x | SP 500 vs. WisdomTree Natural Gas | SP 500 vs. GraniteShares 3x Short | SP 500 vs. WisdomTree Natural Gas |
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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