Correlation Between Pimco Dynamic and Aqr Large

Can any of the company-specific risk be diversified away by investing in both Pimco Dynamic and Aqr Large 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 Dynamic and Aqr Large into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Pimco Dynamic Income and Aqr Large Cap, you can compare the effects of market volatilities on Pimco Dynamic and Aqr Large 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 Dynamic with a short position of Aqr Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco Dynamic and Aqr Large.

Diversification Opportunities for Pimco Dynamic and Aqr Large

0.64

Correlation Coefficient

Pimco Dynamic  Aqr Large

Poor diversification

The 3 months correlation between Pimco and Aqr is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Dynamic Income and Aqr Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aqr Large Cap and Pimco Dynamic 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 Dynamic Income are associated (or correlated) with Aqr Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aqr Large Cap has no effect on the direction of Pimco Dynamic i.e., Pimco Dynamic and Aqr Large go up and down completely randomly.

Pair Corralation between Pimco Dynamic and Aqr Large

Considering the 90-day investment horizon Pimco Dynamic Income is expected to generate 0.66 times more return on investment than Aqr Large. However, Pimco Dynamic Income is 1.52 times less risky than Aqr Large. It trades about 0.15 of its potential returns per unit of risk. Aqr Large Cap is currently generating about 0.01 per unit of risk. If you would invest  1,310  in Pimco Dynamic Income on May 5, 2025 and sell it today you would earn a total of  46.00  from holding Pimco Dynamic Income or generate 3.51% return on investment over 90 days.

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

Pimco Dynamic Income  vs.  Aqr Large Cap

Pimco Dynamic Income

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Pimco Dynamic Income are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy fundamental indicators, Pimco Dynamic is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Aqr Large Cap

Risk-Adjusted Performance

Very Weak

Over the last 90 days Aqr Large Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Aqr Large is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Pimco Dynamic and Aqr Large

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

The idea behind Pimco Dynamic Income and Aqr Large Cap 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.

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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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.