Correlation Between Pimco Dynamic and H2O Retailing

Can any of the company-specific risk be diversified away by investing in both Pimco Dynamic and H2O Retailing 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 H2O Retailing 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 H2O Retailing, you can compare the effects of market volatilities on Pimco Dynamic and H2O Retailing 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 H2O Retailing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco Dynamic and H2O Retailing.

Diversification Opportunities for Pimco Dynamic and H2O Retailing

-0.34

Correlation Coefficient

Pimco Dynamic  H2O Retailing

Very good diversification

The 3 months correlation between Pimco and H2O is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Dynamic Income and H2O Retailing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on H2O Retailing 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 H2O Retailing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of H2O Retailing has no effect on the direction of Pimco Dynamic i.e., Pimco Dynamic and H2O Retailing go up and down completely randomly.

Pair Corralation between Pimco Dynamic and H2O Retailing

Considering the 90-day investment horizon Pimco Dynamic is expected to generate 1.19 times less return on investment than H2O Retailing. But when comparing it to its historical volatility, Pimco Dynamic Income is 4.69 times less risky than H2O Retailing. It trades about 0.15 of its potential returns per unit of risk. H2O Retailing is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  1,140  in H2O Retailing on May 6, 2025 and sell it today you would earn a total of  40.00  from holding H2O Retailing or generate 3.51% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.38%
Values	Daily Returns

Pimco Dynamic Income  vs.  H2O Retailing

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.

H2O Retailing

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in H2O Retailing are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, H2O Retailing is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Pimco Dynamic and H2O Retailing

The main advantage of trading using opposite Pimco Dynamic and H2O Retailing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco Dynamic position performs unexpectedly, H2O Retailing 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 H2O Retailing will offset losses from the drop in H2O Retailing's long position.

The idea behind Pimco Dynamic Income and H2O Retailing 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.