Correlation Between Pimco New and CBH

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

Diversification Opportunities for Pimco New and CBH

-0.65

Correlation Coefficient

Pimco New  CBH

Excellent diversification

The 3 months correlation between Pimco and CBH is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Pimco New York and CBH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CBH 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 CBH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CBH has no effect on the direction of Pimco New i.e., Pimco New and CBH go up and down completely randomly.

Pair Corralation between Pimco New and CBH

Considering the 90-day investment horizon Pimco New is expected to generate 6.96 times less return on investment than CBH. In addition to that, Pimco New is 1.21 times more volatile than CBH. It trades about 0.01 of its total potential returns per unit of risk. CBH is currently generating about 0.07 per unit of volatility. If you would invest  782.00  in CBH on September 3, 2024 and sell it today you would earn a total of  137.00  from holding CBH or generate 17.52% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	87.27%
Values	Daily Returns

Pimco New York  vs.  CBH

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 fairly strong basic indicators, Pimco New is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

CBH

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CBH has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong fundamental drivers, CBH is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Pimco New and CBH

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

The idea behind Pimco New York and CBH 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..