Correlation Between Pimco All and Acr Multi

Can any of the company-specific risk be diversified away by investing in both Pimco All and Acr Multi 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 Acr Multi 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 Acr Multi Strategy Quality, you can compare the effects of market volatilities on Pimco All and Acr Multi 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 Acr Multi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco All and Acr Multi.

Diversification Opportunities for Pimco All and Acr Multi

0.61

Correlation Coefficient

Pimco All  Acr Multi

Poor diversification

The 3 months correlation between Pimco and Acr is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Pimco All Asset and Acr Multi Strategy Quality in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acr Multi Strategy 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 Acr Multi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acr Multi Strategy has no effect on the direction of Pimco All i.e., Pimco All and Acr Multi go up and down completely randomly.

Pair Corralation between Pimco All and Acr Multi

Assuming the 90 days horizon Pimco All is expected to generate 6.96 times less return on investment than Acr Multi. But when comparing it to its historical volatility, Pimco All Asset is 1.91 times less risky than Acr Multi. It trades about 0.02 of its potential returns per unit of risk. Acr Multi Strategy Quality is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  1,234  in Acr Multi Strategy Quality on September 29, 2024 and sell it today you would earn a total of  350.00  from holding Acr Multi Strategy Quality or generate 28.36% return on investment over 90 days.

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

Pimco All Asset  vs.  Acr Multi Strategy Quality

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.

Acr Multi Strategy

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Acr Multi Strategy Quality has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's forward indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Pimco All and Acr Multi

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

The idea behind Pimco All Asset and Acr Multi Strategy Quality 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.