Correlation Between SP 500 and PIMCO Sterling
Can any of the company-specific risk be diversified away by investing in both SP 500 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 SP 500 and PIMCO Sterling into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SP 500 VIX and PIMCO Sterling Short, you can compare the effects of market volatilities on SP 500 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 SP 500 with a short position of PIMCO Sterling. Check out your portfolio center. Please also check ongoing floating volatility patterns of SP 500 and PIMCO Sterling.
Diversification Opportunities for SP 500 and PIMCO Sterling
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between VILX and PIMCO is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding SP 500 VIX 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 SP 500 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 SP 500 VIX 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 SP 500 i.e., SP 500 and PIMCO Sterling go up and down completely randomly.
Pair Corralation between SP 500 and PIMCO Sterling
Assuming the 90 days trading horizon SP 500 VIX is expected to under-perform the PIMCO Sterling. In addition to that, SP 500 is 230.86 times more volatile than PIMCO Sterling Short. It trades about -0.06 of its total potential returns per unit of risk. PIMCO Sterling Short is currently generating about 0.67 per unit of volatility. If you would invest 10,261 in PIMCO Sterling Short on September 12, 2024 and sell it today you would earn a total of 44.00 from holding PIMCO Sterling Short or generate 0.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SP 500 VIX vs. PIMCO Sterling Short
Performance |
| Timeline |
| SP 500 VIX |
| PIMCO Sterling Short |
SP 500 and PIMCO Sterling Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SP 500 and PIMCO Sterling
The main advantage of trading using opposite SP 500 and PIMCO Sterling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SP 500 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.| SP 500 vs. WisdomTree Natural Gas | SP 500 vs. WisdomTree Natural Gas | SP 500 vs. Leverage Shares 2x | SP 500 vs. WisdomTree Silver 3x |
| PIMCO Sterling vs. GraniteShares 3x Short | PIMCO Sterling vs. WisdomTree Natural Gas | PIMCO Sterling vs. Leverage Shares 3x | PIMCO Sterling 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like |