Correlation Between Pimco Dynamic and CSPC Pharmaceutical

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

Diversification Opportunities for Pimco Dynamic and CSPC Pharmaceutical

0.45

Correlation Coefficient

Pimco Dynamic  CSPC Pharmaceutical

Very weak diversification

The 3 months correlation between Pimco and CSPC is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Dynamic Income and CSPC Pharmaceutical Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CSPC Pharmaceutical 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 CSPC Pharmaceutical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CSPC Pharmaceutical has no effect on the direction of Pimco Dynamic i.e., Pimco Dynamic and CSPC Pharmaceutical go up and down completely randomly.

Pair Corralation between Pimco Dynamic and CSPC Pharmaceutical

Considering the 90-day investment horizon Pimco Dynamic is expected to generate 16.57 times less return on investment than CSPC Pharmaceutical. But when comparing it to its historical volatility, Pimco Dynamic Income is 13.06 times less risky than CSPC Pharmaceutical. It trades about 0.15 of its potential returns per unit of risk. CSPC Pharmaceutical Group is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  64.00  in CSPC Pharmaceutical Group on May 4, 2025 and sell it today you would earn a total of  41.00  from holding CSPC Pharmaceutical Group or generate 64.06% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	96.83%
Values	Daily Returns

Pimco Dynamic Income  vs.  CSPC Pharmaceutical Group

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.

CSPC Pharmaceutical

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CSPC Pharmaceutical Group are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly sluggish basic indicators, CSPC Pharmaceutical reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Pimco Dynamic and CSPC Pharmaceutical

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

The idea behind Pimco Dynamic Income and CSPC Pharmaceutical Group 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.