Correlation Between Walmart and PIMCO Enhanced
Can any of the company-specific risk be diversified away by investing in both Walmart and PIMCO Enhanced 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 Walmart and PIMCO Enhanced into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walmart and PIMCO Enhanced Short, you can compare the effects of market volatilities on Walmart and PIMCO Enhanced 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 Walmart with a short position of PIMCO Enhanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and PIMCO Enhanced.
Diversification Opportunities for Walmart and PIMCO Enhanced
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Walmart and PIMCO is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and PIMCO Enhanced Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PIMCO Enhanced Short and Walmart 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 Walmart are associated (or correlated) with PIMCO Enhanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PIMCO Enhanced Short has no effect on the direction of Walmart i.e., Walmart and PIMCO Enhanced go up and down completely randomly.
Pair Corralation between Walmart and PIMCO Enhanced
Considering the 90-day investment horizon Walmart is expected to generate 23.89 times more return on investment than PIMCO Enhanced. However, Walmart is 23.89 times more volatile than PIMCO Enhanced Short. It trades about 0.42 of its potential returns per unit of risk. PIMCO Enhanced Short is currently generating about 0.47 per unit of risk. If you would invest 8,275 in Walmart on August 29, 2024 and sell it today you would earn a total of 913.00 from holding Walmart or generate 11.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Walmart vs. PIMCO Enhanced Short
Performance |
| Timeline |
| Walmart |
| PIMCO Enhanced Short |
Walmart and PIMCO Enhanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and PIMCO Enhanced
The main advantage of trading using opposite Walmart and PIMCO Enhanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, PIMCO Enhanced 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 Enhanced will offset losses from the drop in PIMCO Enhanced's long position.| Walmart vs. Costco Wholesale Corp | Walmart vs. Dollar Tree | Walmart vs. BJs Wholesale Club | Walmart vs. Target |
| PIMCO Enhanced vs. Rbb Fund | PIMCO Enhanced vs. US Treasury 12 | PIMCO Enhanced vs. Rbb Fund | PIMCO Enhanced vs. Rbb Fund |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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