Correlation Between Pimco New and Eagle Capital

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

Diversification Opportunities for Pimco New and Eagle Capital

-0.34

Correlation Coefficient

Pimco New  Eagle Capital

Very good diversification

The 3 months correlation between Pimco and Eagle is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Pimco New York and Eagle Capital Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eagle Capital Growth 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 Eagle Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eagle Capital Growth has no effect on the direction of Pimco New i.e., Pimco New and Eagle Capital go up and down completely randomly.

Pair Corralation between Pimco New and Eagle Capital

Considering the 90-day investment horizon Pimco New is expected to generate 2.61 times less return on investment than Eagle Capital. But when comparing it to its historical volatility, Pimco New York is 2.4 times less risky than Eagle Capital. It trades about 0.05 of its potential returns per unit of risk. Eagle Capital Growth is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  854.00  in Eagle Capital Growth on September 4, 2024 and sell it today you would earn a total of  140.50  from holding Eagle Capital Growth or generate 16.45% return on investment over 90 days.

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

Pimco New York  vs.  Eagle Capital Growth

Pimco New York

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Pimco New York are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of very healthy basic indicators, Pimco New is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Eagle Capital Growth

Risk-Adjusted Performance

2 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Eagle Capital Growth are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Eagle Capital is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Pimco New and Eagle Capital

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

The idea behind Pimco New York and Eagle Capital Growth 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.