Correlation Between Pimco Energy and Pharmaceuticals Ultrasector

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

By analyzing existing cross correlation between Pimco Energy Tactical and Pharmaceuticals Ultrasector Profund, you can compare the effects of market volatilities on Pimco Energy and Pharmaceuticals Ultrasector 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 Energy with a short position of Pharmaceuticals Ultrasector. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco Energy and Pharmaceuticals Ultrasector.

Diversification Opportunities for Pimco Energy and Pharmaceuticals Ultrasector

0.65

Correlation Coefficient

Pimco Energy  Pharmaceuticals Ultrasector

Poor diversification

The 3 months correlation between Pimco and Pharmaceuticals is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Energy Tactical and Pharmaceuticals Ultrasector Pr in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pharmaceuticals Ultrasector and Pimco Energy 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 Energy Tactical are associated (or correlated) with Pharmaceuticals Ultrasector. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pharmaceuticals Ultrasector has no effect on the direction of Pimco Energy i.e., Pimco Energy and Pharmaceuticals Ultrasector go up and down completely randomly.

Pair Corralation between Pimco Energy and Pharmaceuticals Ultrasector

Considering the 90-day investment horizon Pimco Energy is expected to generate 1.69 times less return on investment than Pharmaceuticals Ultrasector. But when comparing it to its historical volatility, Pimco Energy Tactical is 1.83 times less risky than Pharmaceuticals Ultrasector. It trades about 0.18 of its potential returns per unit of risk. Pharmaceuticals Ultrasector Profund is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  2,208  in Pharmaceuticals Ultrasector Profund on May 16, 2025 and sell it today you would earn a total of  397.00  from holding Pharmaceuticals Ultrasector Profund or generate 17.98% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.39%
Values	Daily Returns

Pimco Energy Tactical  vs.  Pharmaceuticals Ultrasector Pr

Pimco Energy Tactical

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Pimco Energy Tactical are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Pimco Energy may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pharmaceuticals Ultrasector

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Pharmaceuticals Ultrasector Profund are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Pharmaceuticals Ultrasector showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Pimco Energy and Pharmaceuticals Ultrasector

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

The idea behind Pimco Energy Tactical and Pharmaceuticals Ultrasector Profund 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.