Correlation Between PIMCO RAFI and Strategy Shares
Can any of the company-specific risk be diversified away by investing in both PIMCO RAFI and Strategy Shares 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 RAFI and Strategy Shares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PIMCO RAFI Dynamic and Strategy Shares, you can compare the effects of market volatilities on PIMCO RAFI and Strategy Shares 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 RAFI with a short position of Strategy Shares. Check out your portfolio center. Please also check ongoing floating volatility patterns of PIMCO RAFI and Strategy Shares.
Diversification Opportunities for PIMCO RAFI and Strategy Shares
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between PIMCO and Strategy is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding PIMCO RAFI Dynamic and Strategy Shares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strategy Shares and PIMCO RAFI 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 RAFI Dynamic are associated (or correlated) with Strategy Shares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strategy Shares has no effect on the direction of PIMCO RAFI i.e., PIMCO RAFI and Strategy Shares go up and down completely randomly.
Pair Corralation between PIMCO RAFI and Strategy Shares
Given the investment horizon of 90 days PIMCO RAFI Dynamic is expected to generate 2.58 times more return on investment than Strategy Shares. However, PIMCO RAFI is 2.58 times more volatile than Strategy Shares. It trades about 0.07 of its potential returns per unit of risk. Strategy Shares is currently generating about 0.1 per unit of risk. If you would invest 3,688 in PIMCO RAFI Dynamic on September 7, 2025 and sell it today you would earn a total of 109.00 from holding PIMCO RAFI Dynamic or generate 2.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PIMCO RAFI Dynamic vs. Strategy Shares
Performance |
| Timeline |
| PIMCO RAFI Dynamic |
| Strategy Shares |
PIMCO RAFI and Strategy Shares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PIMCO RAFI and Strategy Shares
The main advantage of trading using opposite PIMCO RAFI and Strategy Shares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PIMCO RAFI position performs unexpectedly, Strategy Shares 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 Strategy Shares will offset losses from the drop in Strategy Shares' long position.| PIMCO RAFI vs. Strategy Shares | PIMCO RAFI vs. Freedom Day Dividend | PIMCO RAFI vs. Franklin Templeton ETF | PIMCO RAFI vs. iShares MSCI China |
| Strategy Shares vs. Freedom Day Dividend | Strategy Shares vs. Franklin Templeton ETF | Strategy Shares vs. iShares MSCI China | Strategy Shares vs. YieldMax Short NVDA |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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