Correlation Between PIMCO Mortgage and Direxion Daily
Can any of the company-specific risk be diversified away by investing in both PIMCO Mortgage and Direxion Daily 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 Mortgage and Direxion Daily into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PIMCO Mortgage Backed Securities and Direxion Daily TSM, you can compare the effects of market volatilities on PIMCO Mortgage and Direxion Daily 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 Mortgage with a short position of Direxion Daily. Check out your portfolio center. Please also check ongoing floating volatility patterns of PIMCO Mortgage and Direxion Daily.
Diversification Opportunities for PIMCO Mortgage and Direxion Daily
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between PIMCO and Direxion is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding PIMCO Mortgage Backed Securiti and Direxion Daily TSM in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Direxion Daily TSM and PIMCO Mortgage 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 Mortgage Backed Securities are associated (or correlated) with Direxion Daily. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Direxion Daily TSM has no effect on the direction of PIMCO Mortgage i.e., PIMCO Mortgage and Direxion Daily go up and down completely randomly.
Pair Corralation between PIMCO Mortgage and Direxion Daily
Given the investment horizon of 90 days PIMCO Mortgage Backed Securities is expected to generate 0.15 times more return on investment than Direxion Daily. However, PIMCO Mortgage Backed Securities is 6.61 times less risky than Direxion Daily. It trades about 0.27 of its potential returns per unit of risk. Direxion Daily TSM is currently generating about -0.14 per unit of risk. If you would invest 4,740 in PIMCO Mortgage Backed Securities on June 8, 2025 and sell it today you would earn a total of 221.00 from holding PIMCO Mortgage Backed Securities or generate 4.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 98.41% |
| Values | Daily Returns |
PIMCO Mortgage Backed Securiti vs. Direxion Daily TSM
Performance |
| Timeline |
| PIMCO Mortgage Backed |
| Direxion Daily TSM |
PIMCO Mortgage and Direxion Daily Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PIMCO Mortgage and Direxion Daily
The main advantage of trading using opposite PIMCO Mortgage and Direxion Daily positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PIMCO Mortgage position performs unexpectedly, Direxion Daily 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 Direxion Daily will offset losses from the drop in Direxion Daily's long position.| PIMCO Mortgage vs. Fidelity Total Bond | PIMCO Mortgage vs. PIMCO Enhanced Low | PIMCO Mortgage vs. iShares Yield Optimized | PIMCO Mortgage vs. Invesco Variable Rate |
| Direxion Daily vs. ProShares Short MidCap400 | Direxion Daily vs. ProShares UltraShort SmallCap600 | Direxion Daily vs. ProShares UltraShort MidCap400 | Direxion Daily vs. ProShares UltraShort Health |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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