Correlation Between Aa Pimco and White Oak

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

By analyzing existing cross correlation between Aa Pimco Tr and White Oak Select, you can compare the effects of market volatilities on Aa Pimco and White Oak 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 Aa Pimco with a short position of White Oak. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aa Pimco and White Oak.

Diversification Opportunities for Aa Pimco and White Oak

-0.4

Correlation Coefficient

Aa Pimco  White Oak

Very good diversification

The 3 months correlation between PQTIX and White is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Aa Pimco Tr and White Oak Select in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on White Oak Select and Aa Pimco 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 Aa Pimco Tr are associated (or correlated) with White Oak. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of White Oak Select has no effect on the direction of Aa Pimco i.e., Aa Pimco and White Oak go up and down completely randomly.

Pair Corralation between Aa Pimco and White Oak

Assuming the 90 days horizon Aa Pimco is expected to generate 271.33 times less return on investment than White Oak. But when comparing it to its historical volatility, Aa Pimco Tr is 1.31 times less risky than White Oak. It trades about 0.0 of its potential returns per unit of risk. White Oak Select is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  14,771  in White Oak Select on September 2, 2024 and sell it today you would earn a total of  759.00  from holding White Oak Select or generate 5.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Aa Pimco Tr  vs.  White Oak Select

Aa Pimco Tr

Risk-Adjusted Performance

0 of 100

Very Weak

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

White Oak Select

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in White Oak Select are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, White Oak is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Aa Pimco and White Oak

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

The idea behind Aa Pimco Tr and White Oak Select 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.