Correlation Between Pimco All and Americafirst Tactical

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

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

Diversification Opportunities for Pimco All and Americafirst Tactical

-0.44

Correlation Coefficient

Pimco All  Americafirst Tactical

Very good diversification

The 3 months correlation between Pimco and Americafirst is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Pimco All Asset and Americafirst Tactical Alpha in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Americafirst Tactical and Pimco All 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 All Asset are associated (or correlated) with Americafirst Tactical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Americafirst Tactical has no effect on the direction of Pimco All i.e., Pimco All and Americafirst Tactical go up and down completely randomly.

Pair Corralation between Pimco All and Americafirst Tactical

Assuming the 90 days horizon Pimco All Asset is expected to generate 0.31 times more return on investment than Americafirst Tactical. However, Pimco All Asset is 3.27 times less risky than Americafirst Tactical. It trades about -0.2 of its potential returns per unit of risk. Americafirst Tactical Alpha is currently generating about -0.12 per unit of risk. If you would invest  652.00  in Pimco All Asset on September 23, 2024 and sell it today you would lose (12.00) from holding Pimco All Asset or give up 1.84% of portfolio value over 90 days.

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

Pimco All Asset  vs.  Americafirst Tactical Alpha

Pimco All Asset

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pimco All Asset has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Pimco All is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Americafirst Tactical

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Americafirst Tactical Alpha are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Americafirst Tactical may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Pimco All and Americafirst Tactical

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

The idea behind Pimco All Asset and Americafirst Tactical Alpha 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.