Correlation Analysis Between PIMCO 1 and DOW

This module allows you to analyze existing cross correlation between PIMCO 1 5 Year U S TIPS Index and DOW. You can compare the effects of market volatilities on PIMCO 1 and DOW 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 DOW. See also your portfolio center. Please also check ongoing floating volatility patterns of PIMCO 1 and DOW.
Horizon     30 Days    Login   to change
Symbolsvs
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Comparative Performance

 Predicted Return Density 
      Returns 

PIMCO 1 5 Year U S TIPS Index  vs.  DOW

 Performance (%) 
      Timeline 

Pair Volatility

Given the investment horizon of 30 days, PIMCO 1 5 Year U S TIPS Index is expected to generate 0.13 times more return on investment than DOW. However, PIMCO 1 5 Year U S TIPS Index is 7.85 times less risky than DOW. It trades about -0.03 of its potential returns per unit of risk. DOW is currently generating about -0.02 per unit of risk. If you would invest  5,234  in PIMCO 1 5 Year U S TIPS Index on September 20, 2019 and sell it today you would lose (11.00)  from holding PIMCO 1 5 Year U S TIPS Index or give up 0.21% of portfolio value over 30 days.

Pair Corralation between PIMCO 1 and DOW

-0.61
Time Period3 Months [change]
DirectionNegative 
StrengthWeak
Accuracy98.48%
ValuesDaily Returns

Diversification Opportunities for PIMCO 1 and DOW

PIMCO 1 5 Year U S TIPS Index diversification synergy

Excellent diversification

Overlapping area represents the amount of risk that can be diversified away by holding PIMCO 1 5 Year U S TIPS Index and DOW in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on DOW 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 U S TIPS Index are associated (or correlated) with DOW. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DOW has no effect on the direction of PIMCO 1 i.e. PIMCO 1 and DOW go up and down completely randomly.
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