Correlation Between PIMCO 1 and Nano Labs

Can any of the company-specific risk be diversified away by investing in both PIMCO 1 and Nano Labs 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 Nano Labs 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 Nano Labs, you can compare the effects of market volatilities on PIMCO 1 and Nano Labs 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 Nano Labs. Check out your portfolio center. Please also check ongoing floating volatility patterns of PIMCO 1 and Nano Labs.

Diversification Opportunities for PIMCO 1 and Nano Labs

-0.21

Correlation Coefficient

PIMCO 1  Nano Labs

Very good diversification

The 3 months correlation between PIMCO and Nano is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding PIMCO 1 5 Year and Nano Labs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nano Labs 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 Nano Labs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nano Labs has no effect on the direction of PIMCO 1 i.e., PIMCO 1 and Nano Labs go up and down completely randomly.

Pair Corralation between PIMCO 1 and Nano Labs

Given the investment horizon of 90 days PIMCO 1 5 Year is expected to generate 0.01 times more return on investment than Nano Labs. However, PIMCO 1 5 Year is 102.62 times less risky than Nano Labs. It trades about 0.03 of its potential returns per unit of risk. Nano Labs is currently generating about -0.12 per unit of risk. If you would invest  5,115  in PIMCO 1 5 Year on January 25, 2024 and sell it today you would earn a total of  16.00  from holding PIMCO 1 5 Year or generate 0.31% return on investment over 90 days.

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

PIMCO 1 5 Year  vs.  Nano Labs

PIMCO 1 5

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in PIMCO 1 5 Year are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, PIMCO 1 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Nano Labs

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nano Labs has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Etf's basic indicators remain somewhat strong which may send shares a bit higher in May 2024. The current disturbance may also be a sign of long term up-swing for the ETF investors.

Pair Trading with PIMCO 1 and Nano Labs

The main advantage of trading using opposite PIMCO 1 and Nano Labs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PIMCO 1 position performs unexpectedly, Nano Labs 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 Nano Labs will offset losses from the drop in Nano Labs' long position.

The idea behind PIMCO 1 5 Year and Nano Labs 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.