Correlation Between SPDR Bloomberg and PIMCO Broad

Can any of the company-specific risk be diversified away by investing in both SPDR Bloomberg and PIMCO Broad 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 SPDR Bloomberg and PIMCO Broad into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between SPDR Bloomberg 1 10 and PIMCO Broad TIPS, you can compare the effects of market volatilities on SPDR Bloomberg and PIMCO Broad 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 SPDR Bloomberg with a short position of PIMCO Broad. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Bloomberg and PIMCO Broad.

Diversification Opportunities for SPDR Bloomberg and PIMCO Broad

0.0

Correlation Coefficient

SPDR Bloomberg  PIMCO Broad

Pay attention - limited upside

The 3 months correlation between SPDR and PIMCO is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Bloomberg 1 10 and PIMCO Broad TIPS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PIMCO Broad TIPS and SPDR Bloomberg 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 SPDR Bloomberg 1 10 are associated (or correlated) with PIMCO Broad. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PIMCO Broad TIPS has no effect on the direction of SPDR Bloomberg i.e., SPDR Bloomberg and PIMCO Broad go up and down completely randomly.

Pair Corralation between SPDR Bloomberg and PIMCO Broad

If you would invest  1,854  in SPDR Bloomberg 1 10 on February 3, 2025 and sell it today you would earn a total of  44.00  from holding SPDR Bloomberg 1 10 or generate 2.37% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

SPDR Bloomberg 1 10  vs.  PIMCO Broad TIPS

SPDR Bloomberg 1

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SPDR Bloomberg 1 10 are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, SPDR Bloomberg is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

PIMCO Broad TIPS

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in PIMCO Broad TIPS are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, PIMCO Broad is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with SPDR Bloomberg and PIMCO Broad

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

The idea behind SPDR Bloomberg 1 10 and PIMCO Broad TIPS 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.