Correlation Between PIMCO 1 and Boeing
Can any of the company-specific risk be diversified away by investing in both PIMCO 1 and Boeing 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 1 and Boeing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PIMCO 1 5 Year and The Boeing, you can compare the effects of market volatilities on PIMCO 1 and Boeing 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 1 with a short position of Boeing. Check out your portfolio center. Please also check ongoing floating volatility patterns of PIMCO 1 and Boeing.
Diversification Opportunities for PIMCO 1 and Boeing
Excellent diversification
The 3 months correlation between PIMCO and Boeing is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding PIMCO 1 5 Year and The Boeing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boeing and PIMCO 1 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 1 5 Year are associated (or correlated) with Boeing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boeing has no effect on the direction of PIMCO 1 i.e., PIMCO 1 and Boeing go up and down completely randomly.
Pair Corralation between PIMCO 1 and Boeing
Given the investment horizon of 90 days PIMCO 1 5 Year is expected to generate 0.12 times more return on investment than Boeing. However, PIMCO 1 5 Year is 8.1 times less risky than Boeing. It trades about -0.04 of its potential returns per unit of risk. The Boeing is currently generating about -0.49 per unit of risk. If you would invest 5,138 in PIMCO 1 5 Year on January 24, 2024 and sell it today you would lose (7.00) from holding PIMCO 1 5 Year or give up 0.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PIMCO 1 5 Year vs. The Boeing
Performance |
| Timeline |
| PIMCO 1 5 |
| Boeing |
PIMCO 1 and Boeing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PIMCO 1 and Boeing
The main advantage of trading using opposite PIMCO 1 and Boeing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PIMCO 1 position performs unexpectedly, Boeing 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 Boeing will offset losses from the drop in Boeing's long position.| PIMCO 1 vs. HUMANA INC | PIMCO 1 vs. Aquagold International | PIMCO 1 vs. Barloworld Ltd ADR | PIMCO 1 vs. Morningstar Unconstrained Allocation |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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