Correlation Between Pimco Short and Siit Ultra

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

By analyzing existing cross correlation between Pimco Short Asset and Siit Ultra Short, you can compare the effects of market volatilities on Pimco Short and Siit Ultra 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 Short with a short position of Siit Ultra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco Short and Siit Ultra.

Diversification Opportunities for Pimco Short and Siit Ultra

0.95

Correlation Coefficient

Pimco Short  Siit Ultra

Almost no diversification

The 3 months correlation between Pimco and Siit is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Short Asset and Siit Ultra Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siit Ultra Short and Pimco Short 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 Short Asset are associated (or correlated) with Siit Ultra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siit Ultra Short has no effect on the direction of Pimco Short i.e., Pimco Short and Siit Ultra go up and down completely randomly.

Pair Corralation between Pimco Short and Siit Ultra

Assuming the 90 days horizon Pimco Short is expected to generate 1.04 times less return on investment than Siit Ultra. But when comparing it to its historical volatility, Pimco Short Asset is 1.06 times less risky than Siit Ultra. It trades about 0.23 of its potential returns per unit of risk. Siit Ultra Short is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  919.00  in Siit Ultra Short on September 12, 2024 and sell it today you would earn a total of  78.00  from holding Siit Ultra Short or generate 8.49% return on investment over 90 days.

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

Pimco Short Asset  vs.  Siit Ultra Short

Pimco Short Asset

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Pimco Short Asset are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Pimco Short is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Siit Ultra Short

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Siit Ultra Short are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Siit Ultra is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Pimco Short and Siit Ultra

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

The idea behind Pimco Short Asset and Siit Ultra Short 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.