Correlation Between IMGP DBi and Pimco Stocksplus

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

By analyzing existing cross correlation between iMGP DBi Managed and Pimco Stocksplus Long, you can compare the effects of market volatilities on IMGP DBi and Pimco Stocksplus 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 IMGP DBi with a short position of Pimco Stocksplus. Check out your portfolio center. Please also check ongoing floating volatility patterns of IMGP DBi and Pimco Stocksplus.

Diversification Opportunities for IMGP DBi and Pimco Stocksplus

0.52

Correlation Coefficient

IMGP DBi  Pimco Stocksplus

Very weak diversification

The 3 months correlation between IMGP and Pimco is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding iMGP DBi Managed and Pimco Stocksplus Long in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco Stocksplus Long and IMGP DBi 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 iMGP DBi Managed are associated (or correlated) with Pimco Stocksplus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco Stocksplus Long has no effect on the direction of IMGP DBi i.e., IMGP DBi and Pimco Stocksplus go up and down completely randomly.

Pair Corralation between IMGP DBi and Pimco Stocksplus

Given the investment horizon of 90 days iMGP DBi Managed is expected to under-perform the Pimco Stocksplus. But the etf apears to be less risky and, when comparing its historical volatility, iMGP DBi Managed is 2.09 times less risky than Pimco Stocksplus. The etf trades about -0.09 of its potential returns per unit of risk. The Pimco Stocksplus Long is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  1,717  in Pimco Stocksplus Long on August 30, 2024 and sell it today you would earn a total of  79.00  from holding Pimco Stocksplus Long or generate 4.6% return on investment over 90 days.

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

iMGP DBi Managed  vs.  Pimco Stocksplus Long

iMGP DBi Managed

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days iMGP DBi Managed has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable primary indicators, IMGP DBi is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pimco Stocksplus Long

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Pimco Stocksplus Long are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Pimco Stocksplus is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with IMGP DBi and Pimco Stocksplus

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

The idea behind iMGP DBi Managed and Pimco Stocksplus Long 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.