Correlation Between Pimco New and Swiss Helvetia

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

By analyzing existing cross correlation between Pimco New York and Swiss Helvetia Closed, you can compare the effects of market volatilities on Pimco New and Swiss Helvetia 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 New with a short position of Swiss Helvetia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco New and Swiss Helvetia.

Diversification Opportunities for Pimco New and Swiss Helvetia

0.87

Correlation Coefficient

Pimco New  Swiss Helvetia

Very poor diversification

The 3 months correlation between Pimco and Swiss is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Pimco New York and Swiss Helvetia Closed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Swiss Helvetia Closed and Pimco New 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 New York are associated (or correlated) with Swiss Helvetia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Swiss Helvetia Closed has no effect on the direction of Pimco New i.e., Pimco New and Swiss Helvetia go up and down completely randomly.

Pair Corralation between Pimco New and Swiss Helvetia

Considering the 90-day investment horizon Pimco New York is expected to generate 0.62 times more return on investment than Swiss Helvetia. However, Pimco New York is 1.62 times less risky than Swiss Helvetia. It trades about -0.12 of its potential returns per unit of risk. Swiss Helvetia Closed is currently generating about -0.17 per unit of risk. If you would invest  818.00  in Pimco New York on September 13, 2024 and sell it today you would lose (32.00) from holding Pimco New York or give up 3.91% of portfolio value over 90 days.

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

Pimco New York  vs.  Swiss Helvetia Closed

Pimco New York

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pimco New York has generated negative risk-adjusted returns adding no value to fund investors. Despite nearly stable basic indicators, Pimco New is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Swiss Helvetia Closed

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Swiss Helvetia Closed has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest uncertain performance, the Fund's basic 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 New and Swiss Helvetia

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

The idea behind Pimco New York and Swiss Helvetia Closed 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.

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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.