Correlation Between Inverse High and Pimco Preferred | RYIHX vs. PFNNX

Correlation Between Inverse High and Pimco Preferred

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Inverse High and Pimco Preferred 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 Inverse High and Pimco Preferred into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Inverse High Yield and Pimco Preferred And, you can compare the effects of market volatilities on Inverse High and Pimco Preferred 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 Inverse High with a short position of Pimco Preferred. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inverse High and Pimco Preferred.

Diversification Opportunities for Inverse High and Pimco Preferred

InversePimcoDiversified AwayInversePimcoDiversified Away100%
-0.06
  Correlation Coefficient

Good diversification

The 3 months correlation between Inverse and Pimco is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Inverse High Yield and Pimco Preferred And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco Preferred And and Inverse High 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 Inverse High Yield are associated (or correlated) with Pimco Preferred. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco Preferred And has no effect on the direction of Inverse High i.e., Inverse High and Pimco Preferred go up and down completely randomly.

Pair Corralation between Inverse High and Pimco Preferred

Assuming the 90 days horizon Inverse High Yield is expected to under-perform the Pimco Preferred. In addition to that, Inverse High is 2.05 times more volatile than Pimco Preferred And. It trades about -0.14 of its total potential returns per unit of risk. Pimco Preferred And is currently generating about 0.3 per unit of volatility. If you would invest  937.00  in Pimco Preferred And on September 16, 2024 and sell it today you would earn a total of  7.00  from holding Pimco Preferred And or generate 0.75% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Inverse High Yield  vs.  Pimco Preferred And

 Performance 
JavaScript chart by amCharts 3.21.15OctNov -0.50.00.51.01.52.02.5
JavaScript chart by amCharts 3.21.15RYIHX PFNNX
       Timeline  
Inverse High Yield 

Risk-Adjusted Performance

9 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Inverse High Yield are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical indicators, Inverse High is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec48.448.648.84949.249.449.649.850
Pimco Preferred And 

Risk-Adjusted Performance

12 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Pimco Preferred And are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Pimco Preferred is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec9.349.369.389.49.429.449.46

Inverse High and Pimco Preferred Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-0.79-0.54-0.29-0.08020.007240.09050.320.570.821.07 5101520
JavaScript chart by amCharts 3.21.15RYIHX PFNNX
       Returns  

Pair Trading with Inverse High and Pimco Preferred

The main advantage of trading using opposite Inverse High and Pimco Preferred positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inverse High position performs unexpectedly, Pimco Preferred 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 Preferred will offset losses from the drop in Pimco Preferred's long position.
The idea behind Inverse High Yield and Pimco Preferred And 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.

Other Complementary Tools

Content Syndication
Quickly integrate customizable finance content to your own investment portal
Correlation Analysis
Reduce portfolio risk simply by holding instruments which are not perfectly correlated
Bollinger Bands
Use Bollinger Bands indicator to analyze target price for a given investing horizon
Portfolio Suggestion
Get suggestions outside of your existing asset allocation including your own model portfolios
Portfolio Optimization
Compute new portfolio that will generate highest expected return given your specified tolerance for risk