Correlation Between PIMCO 15 and ProShares Short
Can any of the company-specific risk be diversified away by investing in both PIMCO 15 and ProShares Short 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 15 and ProShares Short into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PIMCO 15 Year and ProShares Short 20, you can compare the effects of market volatilities on PIMCO 15 and ProShares Short 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 15 with a short position of ProShares Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of PIMCO 15 and ProShares Short.
Diversification Opportunities for PIMCO 15 and ProShares Short
-0.96 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between PIMCO and ProShares is -0.96. Overlapping area represents the amount of risk that can be diversified away by holding PIMCO 15 Year and ProShares Short 20 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Short 20 and PIMCO 15 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 15 Year are associated (or correlated) with ProShares Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares Short 20 has no effect on the direction of PIMCO 15 i.e., PIMCO 15 and ProShares Short go up and down completely randomly.
Pair Corralation between PIMCO 15 and ProShares Short
Given the investment horizon of 90 days PIMCO 15 Year is expected to under-perform the ProShares Short. But the etf apears to be less risky and, when comparing its historical volatility, PIMCO 15 Year is 1.06 times less risky than ProShares Short. The etf trades about -0.17 of its potential returns per unit of risk. The ProShares Short 20 is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 2,359 in ProShares Short 20 on January 20, 2024 and sell it today you would earn a total of 112.00 from holding ProShares Short 20 or generate 4.75% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
PIMCO 15 Year vs. ProShares Short 20
Performance |
Timeline |
PIMCO 15 Year |
ProShares Short 20 |
PIMCO 15 and ProShares Short Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with PIMCO 15 and ProShares Short
The main advantage of trading using opposite PIMCO 15 and ProShares Short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PIMCO 15 position performs unexpectedly, ProShares Short 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 ProShares Short will offset losses from the drop in ProShares Short's long position.PIMCO 15 vs. iShares iBoxx Investment | PIMCO 15 vs. iShares 1 3 Year | PIMCO 15 vs. iShares 7 10 Year | PIMCO 15 vs. iShares Core Aggregate |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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