Correlation Between SP 500 and PIMCO Short
Can any of the company-specific risk be diversified away by investing in both SP 500 and PIMCO Short 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 Short 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 Short Term High, you can compare the effects of market volatilities on SP 500 and PIMCO Short 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 Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of SP 500 and PIMCO Short.
Diversification Opportunities for SP 500 and PIMCO Short
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between VILX and PIMCO is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding SP 500 VIX and PIMCO Short Term High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PIMCO Short Term 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 Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PIMCO Short Term has no effect on the direction of SP 500 i.e., SP 500 and PIMCO Short go up and down completely randomly.
Pair Corralation between SP 500 and PIMCO Short
Assuming the 90 days trading horizon SP 500 VIX is expected to under-perform the PIMCO Short. In addition to that, SP 500 is 34.4 times more volatile than PIMCO Short Term High. It trades about -0.08 of its total potential returns per unit of risk. PIMCO Short Term High is currently generating about 0.24 per unit of volatility. If you would invest 15,407 in PIMCO Short Term High on September 13, 2024 and sell it today you would earn a total of 158.00 from holding PIMCO Short Term High or generate 1.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SP 500 VIX vs. PIMCO Short Term High
Performance |
| Timeline |
| SP 500 VIX |
| PIMCO Short Term |
SP 500 and PIMCO Short Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SP 500 and PIMCO Short
The main advantage of trading using opposite SP 500 and PIMCO Short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SP 500 position performs unexpectedly, PIMCO Short 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 Short will offset losses from the drop in PIMCO Short's long position.| SP 500 vs. iShares MSCI Japan | SP 500 vs. Amundi EUR High | SP 500 vs. iShares JP Morgan | SP 500 vs. Xtrackers MSCI |
| PIMCO Short vs. PIMCO Dollar Short | PIMCO Short vs. PIMCO Low Duration | PIMCO Short vs. PIMCO ETFs plc | PIMCO Short 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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