Correlation Between SPDR DoubleLine and PIMCO Enhanced
Can any of the company-specific risk be diversified away by investing in both SPDR DoubleLine and PIMCO Enhanced 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 SPDR DoubleLine and PIMCO Enhanced into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR DoubleLine Short and PIMCO Enhanced Low, you can compare the effects of market volatilities on SPDR DoubleLine and PIMCO Enhanced 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 SPDR DoubleLine with a short position of PIMCO Enhanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR DoubleLine and PIMCO Enhanced.
Diversification Opportunities for SPDR DoubleLine and PIMCO Enhanced
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between SPDR and PIMCO is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding SPDR DoubleLine Short and PIMCO Enhanced Low in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PIMCO Enhanced Low and SPDR DoubleLine 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 SPDR DoubleLine Short are associated (or correlated) with PIMCO Enhanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PIMCO Enhanced Low has no effect on the direction of SPDR DoubleLine i.e., SPDR DoubleLine and PIMCO Enhanced go up and down completely randomly.
Pair Corralation between SPDR DoubleLine and PIMCO Enhanced
Given the investment horizon of 90 days SPDR DoubleLine is expected to generate 1.14 times less return on investment than PIMCO Enhanced. But when comparing it to its historical volatility, SPDR DoubleLine Short is 1.42 times less risky than PIMCO Enhanced. It trades about 0.23 of its potential returns per unit of risk. PIMCO Enhanced Low is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 9,056 in PIMCO Enhanced Low on January 24, 2024 and sell it today you would earn a total of 367.00 from holding PIMCO Enhanced Low or generate 4.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR DoubleLine Short vs. PIMCO Enhanced Low
Performance |
| Timeline |
| SPDR DoubleLine Short |
| PIMCO Enhanced Low |
SPDR DoubleLine and PIMCO Enhanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR DoubleLine and PIMCO Enhanced
The main advantage of trading using opposite SPDR DoubleLine and PIMCO Enhanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR DoubleLine position performs unexpectedly, PIMCO Enhanced 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 PIMCO Enhanced will offset losses from the drop in PIMCO Enhanced's long position.| SPDR DoubleLine vs. SPDR DoubleLine Emerging | SPDR DoubleLine vs. SPDR SSgA Ultra | SPDR DoubleLine vs. SPDR Bloomberg 1 10 | SPDR DoubleLine vs. SPDR DoubleLine Total |
| PIMCO Enhanced vs. SPDR DoubleLine Emerging | PIMCO Enhanced vs. SPDR SSgA Ultra | PIMCO Enhanced vs. SPDR Bloomberg 1 10 | PIMCO Enhanced vs. SPDR DoubleLine Total |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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