Correlation Between PIMCO 1 and SFHY
Can any of the company-specific risk be diversified away by investing in both PIMCO 1 and SFHY 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 SFHY 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 SFHY, you can compare the effects of market volatilities on PIMCO 1 and SFHY 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 SFHY. Check out your portfolio center. Please also check ongoing floating volatility patterns of PIMCO 1 and SFHY.
Diversification Opportunities for PIMCO 1 and SFHY
Pay attention - limited upside
The 3 months correlation between PIMCO and SFHY is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding PIMCO 1 5 Year and SFHY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SFHY 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 SFHY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SFHY has no effect on the direction of PIMCO 1 i.e., PIMCO 1 and SFHY go up and down completely randomly.
Pair Corralation between PIMCO 1 and SFHY
If you would invest 5,088 in PIMCO 1 5 Year on February 18, 2024 and sell it today you would earn a total of 64.00 from holding PIMCO 1 5 Year or generate 1.26% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 0.0% |
Values | Daily Returns |
PIMCO 1 5 Year vs. SFHY
Performance |
Timeline |
PIMCO 1 5 |
SFHY |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
PIMCO 1 and SFHY Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with PIMCO 1 and SFHY
The main advantage of trading using opposite PIMCO 1 and SFHY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PIMCO 1 position performs unexpectedly, SFHY 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 SFHY will offset losses from the drop in SFHY's long position.The idea behind PIMCO 1 5 Year and SFHY 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.SFHY vs. Vanguard Total Stock | SFHY vs. SPDR SP 500 | SFHY vs. iShares Core SP | SFHY vs. Vanguard Total Bond |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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