Correlation Between PIMCO 1 and IShares Short
Can any of the company-specific risk be diversified away by investing in both PIMCO 1 and IShares Short 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 IShares Short 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 IShares Short Treasury, you can compare the effects of market volatilities on PIMCO 1 and IShares Short 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 IShares Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of PIMCO 1 and IShares Short.
Diversification Opportunities for PIMCO 1 and IShares Short
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between PIMCO and IShares is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding PIMCO 1-5 Year and IShares Short Treasury in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IShares Short Treasury 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 IShares Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IShares Short Treasury has no effect on the direction of PIMCO 1 i.e., PIMCO 1 and IShares Short go up and down completely randomly.
Pair Corralation between PIMCO 1 and IShares Short
Given the investment horizon of 90 days PIMCO 1 is expected to generate 6.08 times less return on investment than IShares Short. In addition to that, PIMCO 1 is 12.18 times more volatile than IShares Short Treasury. It trades about 0.01 of its total potential returns per unit of risk. IShares Short Treasury is currently generating about 0.74 per unit of volatility. If you would invest 10,287 in IShares Short Treasury on December 29, 2023 and sell it today you would earn a total of 766.00 from holding IShares Short Treasury or generate 7.45% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
PIMCO 1-5 Year vs. IShares Short Treasury
Performance |
Timeline |
PIMCO 1-5 Year |
IShares Short Treasury |
PIMCO 1 and IShares Short Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with PIMCO 1 and IShares Short
The main advantage of trading using opposite PIMCO 1 and IShares Short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PIMCO 1 position performs unexpectedly, IShares Short 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 IShares Short will offset losses from the drop in IShares Short's long position.PIMCO 1 vs. Vanguard Short Term Inflation Protected | PIMCO 1 vs. IShares TIPS Bond | PIMCO 1 vs. Invesco PureBeta 0 5 | PIMCO 1 vs. Goldman Sachs Access |
IShares Short vs. US Treasury 12 | IShares Short vs. Tidal Trust II | IShares Short vs. Franklin Liberty US | IShares Short vs. SPDR Bloomberg 1 3 |
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 AI Investment Finder module to use AI to screen and filter profitable investment opportunities.
Other Complementary Tools
Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
Stocks Directory Find actively traded stocks across global markets | |
Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
FinTech Suite Use AI to screen and filter profitable investment opportunities |