Correlation Between Pimco Rae and California Intermediate
Can any of the company-specific risk be diversified away by investing in both Pimco Rae and California Intermediate 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 Rae and California Intermediate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pimco Rae Worldwide and California Intermediate Municipal, you can compare the effects of market volatilities on Pimco Rae and California Intermediate 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 Rae with a short position of California Intermediate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco Rae and California Intermediate.
Diversification Opportunities for Pimco Rae and California Intermediate
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Pimco and CALIFORNIA is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Rae Worldwide and California Intermediate Munici in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on California Intermediate and Pimco Rae 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 Rae Worldwide are associated (or correlated) with California Intermediate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of California Intermediate has no effect on the direction of Pimco Rae i.e., Pimco Rae and California Intermediate go up and down completely randomly.
Pair Corralation between Pimco Rae and California Intermediate
Assuming the 90 days horizon Pimco Rae Worldwide is expected to generate 3.03 times more return on investment than California Intermediate. However, Pimco Rae is 3.03 times more volatile than California Intermediate Municipal. It trades about 0.06 of its potential returns per unit of risk. California Intermediate Municipal is currently generating about 0.06 per unit of risk. If you would invest 630.00 in Pimco Rae Worldwide on June 8, 2025 and sell it today you would earn a total of 147.00 from holding Pimco Rae Worldwide or generate 23.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pimco Rae Worldwide vs. California Intermediate Munici
Performance |
| Timeline |
| Pimco Rae Worldwide |
| California Intermediate |
Pimco Rae and California Intermediate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pimco Rae and California Intermediate
The main advantage of trading using opposite Pimco Rae and California Intermediate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco Rae position performs unexpectedly, California Intermediate 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 California Intermediate will offset losses from the drop in California Intermediate's long position.| Pimco Rae vs. Pimco Rae Worldwide | Pimco Rae vs. Pimco Rae Worldwide | Pimco Rae vs. Pimco Rae Worldwide | Pimco Rae vs. Pimco Foreign Bond |
| California Intermediate vs. Pimco Rae Worldwide | California Intermediate vs. Pimco Rae Worldwide | California Intermediate vs. Pimco Rae Worldwide | California Intermediate vs. Pimco Rae Worldwide |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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