Correlation Between Pimco Global and Pimco Capital

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

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

Diversification Opportunities for Pimco Global and Pimco Capital

0.66

Correlation Coefficient

Pimco Global  Pimco Capital

Poor diversification

The 3 months correlation between Pimco and Pimco is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Global Multi Asset and Pimco Capital Sec in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco Capital Sec and Pimco Global 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 Global Multi Asset are associated (or correlated) with Pimco Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco Capital Sec has no effect on the direction of Pimco Global i.e., Pimco Global and Pimco Capital go up and down completely randomly.

Pair Corralation between Pimco Global and Pimco Capital

Assuming the 90 days horizon Pimco Global Multi Asset is expected to under-perform the Pimco Capital. In addition to that, Pimco Global is 3.13 times more volatile than Pimco Capital Sec. It trades about -0.01 of its total potential returns per unit of risk. Pimco Capital Sec is currently generating about -0.01 per unit of volatility. If you would invest  937.00  in Pimco Capital Sec on September 26, 2024 and sell it today you would lose (1.00) from holding Pimco Capital Sec or give up 0.11% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

Pimco Global Multi Asset  vs.  Pimco Capital Sec

Pimco Global Multi

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pimco Capital Sec

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pimco Capital Sec has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Pimco Capital 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 Global and Pimco Capital

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

The idea behind Pimco Global Multi Asset and Pimco Capital Sec 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.