Correlation Between PIMCO 1 and Goldman Sachs
Can any of the company-specific risk be diversified away by investing in both PIMCO 1 and Goldman Sachs 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 1 and Goldman Sachs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PIMCO 1 5 Year and Goldman Sachs Access, you can compare the effects of market volatilities on PIMCO 1 and Goldman Sachs 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 1 with a short position of Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of PIMCO 1 and Goldman Sachs.
Diversification Opportunities for PIMCO 1 and Goldman Sachs
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between PIMCO and Goldman is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding PIMCO 1 5 Year and Goldman Sachs Access in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs Access and PIMCO 1 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 1 5 Year are associated (or correlated) with Goldman Sachs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goldman Sachs Access has no effect on the direction of PIMCO 1 i.e., PIMCO 1 and Goldman Sachs go up and down completely randomly.
Pair Corralation between PIMCO 1 and Goldman Sachs
Given the investment horizon of 90 days PIMCO 1 5 Year is expected to generate 0.44 times more return on investment than Goldman Sachs. However, PIMCO 1 5 Year is 2.29 times less risky than Goldman Sachs. It trades about 0.13 of its potential returns per unit of risk. Goldman Sachs Access is currently generating about 0.04 per unit of risk. If you would invest 5,238 in PIMCO 1 5 Year on August 30, 2024 and sell it today you would earn a total of 17.00 from holding PIMCO 1 5 Year or generate 0.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PIMCO 1 5 Year vs. Goldman Sachs Access
Performance |
| Timeline |
| PIMCO 1 5 |
| Goldman Sachs Access |
PIMCO 1 and Goldman Sachs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PIMCO 1 and Goldman Sachs
The main advantage of trading using opposite PIMCO 1 and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PIMCO 1 position performs unexpectedly, Goldman Sachs 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 Goldman Sachs will offset losses from the drop in Goldman Sachs' long position.| PIMCO 1 vs. PIMCO Broad TIPS | PIMCO 1 vs. PIMCO 15 Year | PIMCO 1 vs. SPDR FTSE International | PIMCO 1 vs. FlexShares iBoxx 3 Year |
| Goldman Sachs vs. SPDR Bloomberg 1 10 | Goldman Sachs vs. PIMCO Broad TIPS | Goldman Sachs vs. SPDR Portfolio TIPS | Goldman Sachs vs. FlexShares iBoxx 5 Year |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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