Correlation Between BRF SA and Pimco Investment
Can any of the company-specific risk be diversified away by investing in both BRF SA and Pimco Investment 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 BRF SA and Pimco Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BRF SA ADR and Pimco Investment Grade, you can compare the effects of market volatilities on BRF SA and Pimco Investment 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 BRF SA with a short position of Pimco Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of BRF SA and Pimco Investment.
Diversification Opportunities for BRF SA and Pimco Investment
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between BRF and Pimco is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding BRF SA ADR and Pimco Investment Grade in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco Investment Grade and BRF SA 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 BRF SA ADR are associated (or correlated) with Pimco Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco Investment Grade has no effect on the direction of BRF SA i.e., BRF SA and Pimco Investment go up and down completely randomly.
Pair Corralation between BRF SA and Pimco Investment
Given the investment horizon of 90 days BRF SA ADR is expected to generate 6.89 times more return on investment than Pimco Investment. However, BRF SA is 6.89 times more volatile than Pimco Investment Grade. It trades about 0.05 of its potential returns per unit of risk. Pimco Investment Grade is currently generating about 0.03 per unit of risk. If you would invest 334.00 in BRF SA ADR on March 24, 2025 and sell it today you would earn a total of 26.00 from holding BRF SA ADR or generate 7.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BRF SA ADR vs. Pimco Investment Grade
Performance |
| Timeline |
| BRF SA ADR |
| Pimco Investment Grade |
BRF SA and Pimco Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BRF SA and Pimco Investment
The main advantage of trading using opposite BRF SA and Pimco Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BRF SA position performs unexpectedly, Pimco Investment 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 Investment will offset losses from the drop in Pimco Investment's long position.| BRF SA vs. Marfrig Global Foods | BRF SA vs. Pilgrims Pride Corp | BRF SA vs. John B Sanfilippo | BRF SA vs. Seneca Foods Corp |
| Pimco Investment vs. Cmg Ultra Short | Pimco Investment vs. Touchstone Ultra Short | Pimco Investment vs. Alpine Ultra Short | Pimco Investment vs. Virtus Multi Sector Short |
Check out your portfolio center.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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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