Correlation Between Central Europe and Pimco New

Can any of the company-specific risk be diversified away by investing in both Central Europe and Pimco New 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 Central Europe and Pimco New into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Central Europe Russia and Pimco New York, you can compare the effects of market volatilities on Central Europe and Pimco New 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 Central Europe with a short position of Pimco New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Central Europe and Pimco New.

Diversification Opportunities for Central Europe and Pimco New

-0.43

Correlation Coefficient

Central Europe  Pimco New

Very good diversification

The 3 months correlation between Central and Pimco is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Central Europe Russia and Pimco New York in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco New York and Central Europe 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 Central Europe Russia are associated (or correlated) with Pimco New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco New York has no effect on the direction of Central Europe i.e., Central Europe and Pimco New go up and down completely randomly.

Pair Corralation between Central Europe and Pimco New

Considering the 90-day investment horizon Central Europe Russia is expected to generate 2.76 times more return on investment than Pimco New. However, Central Europe is 2.76 times more volatile than Pimco New York. It trades about 0.13 of its potential returns per unit of risk. Pimco New York is currently generating about 0.02 per unit of risk. If you would invest  1,037  in Central Europe Russia on September 3, 2024 and sell it today you would earn a total of  151.00  from holding Central Europe Russia or generate 14.56% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Central Europe Russia  vs.  Pimco New York

Central Europe Russia

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Central Europe Russia are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of rather fragile technical and fundamental indicators, Central Europe exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pimco New York

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Pimco New York are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of very healthy basic indicators, Pimco New is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Central Europe and Pimco New

The main advantage of trading using opposite Central Europe and Pimco New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Central Europe position performs unexpectedly, Pimco New 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 New will offset losses from the drop in Pimco New's long position.

The idea behind Central Europe Russia and Pimco New York pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.