Correlation Between Pimco International and Pimco Rae
Can any of the company-specific risk be diversified away by investing in both Pimco International and Pimco Rae 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 International and Pimco Rae into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pimco International Stocksplus and Pimco Rae Plus, you can compare the effects of market volatilities on Pimco International and Pimco Rae 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 International with a short position of Pimco Rae. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco International and Pimco Rae.
Diversification Opportunities for Pimco International and Pimco Rae
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Pimco and Pimco is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Pimco International Stocksplus and Pimco Rae Plus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco Rae Plus and Pimco International 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 International Stocksplus are associated (or correlated) with Pimco Rae. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco Rae Plus has no effect on the direction of Pimco International i.e., Pimco International and Pimco Rae go up and down completely randomly.
Pair Corralation between Pimco International and Pimco Rae
Assuming the 90 days horizon Pimco International Stocksplus is expected to generate 0.71 times more return on investment than Pimco Rae. However, Pimco International Stocksplus is 1.4 times less risky than Pimco Rae. It trades about -0.03 of its potential returns per unit of risk. Pimco Rae Plus is currently generating about -0.03 per unit of risk. If you would invest 777.00 in Pimco International Stocksplus on September 25, 2024 and sell it today you would lose (10.00) from holding Pimco International Stocksplus or give up 1.29% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Pimco International Stocksplus vs. Pimco Rae Plus
Performance |
Timeline |
Pimco International |
Pimco Rae Plus |
Pimco International and Pimco Rae Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Pimco International and Pimco Rae
The main advantage of trading using opposite Pimco International and Pimco Rae positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco International position performs unexpectedly, Pimco Rae 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 Rae will offset losses from the drop in Pimco Rae's long position.Pimco International vs. Pimco Small Cap | Pimco International vs. Fundamental Indexplus Tr | Pimco International vs. Stocksplus Total Return | Pimco International vs. Investment Grade Porate |
Pimco Rae vs. Pimco Small Cap | Pimco Rae vs. Pimco International Stocksplus | Pimco Rae vs. Stocksplus Total Return | Pimco Rae vs. Realestaterealreturn Strategy Fund |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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