Correlation Between PIMCO Energy and Central Securities

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

By analyzing existing cross correlation between PIMCO Energy And and Central Securities, you can compare the effects of market volatilities on PIMCO Energy and Central Securities 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 PIMCO Energy with a short position of Central Securities. Check out your portfolio center. Please also check ongoing floating volatility patterns of PIMCO Energy and Central Securities.

Diversification Opportunities for PIMCO Energy and Central Securities

0.88

Correlation Coefficient

PIMCO Energy  Central Securities

Very poor diversification

The 3 months correlation between PIMCO and Central is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding PIMCO Energy And and Central Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Central Securities and PIMCO Energy 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 PIMCO Energy And are associated (or correlated) with Central Securities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Central Securities has no effect on the direction of PIMCO Energy i.e., PIMCO Energy and Central Securities go up and down completely randomly.

Pair Corralation between PIMCO Energy and Central Securities

If you would invest  4,266  in Central Securities on September 3, 2024 and sell it today you would earn a total of  428.00  from holding Central Securities or generate 10.03% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	1.56%
Values	Daily Returns

PIMCO Energy And  vs.  Central Securities

PIMCO Energy And

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PIMCO Energy And has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical and fundamental indicators, PIMCO Energy is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Central Securities

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Central Securities are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak technical and fundamental indicators, Central Securities may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with PIMCO Energy and Central Securities

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

The idea behind PIMCO Energy And and Central Securities 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.

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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.