Correlation Between IShares VII and PIMCO Short

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

By analyzing existing cross correlation between iShares VII PLC and PIMCO Short Term High, you can compare the effects of market volatilities on IShares VII and PIMCO Short 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 IShares VII with a short position of PIMCO Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares VII and PIMCO Short.

Diversification Opportunities for IShares VII and PIMCO Short

0.94

Correlation Coefficient

IShares VII  PIMCO Short

Almost no diversification

The 3 months correlation between IShares and PIMCO is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding iShares VII PLC and PIMCO Short Term High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PIMCO Short Term and IShares VII 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 iShares VII PLC are associated (or correlated) with PIMCO Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PIMCO Short Term has no effect on the direction of IShares VII i.e., IShares VII and PIMCO Short go up and down completely randomly.

Pair Corralation between IShares VII and PIMCO Short

Assuming the 90 days trading horizon iShares VII PLC is expected to generate 6.13 times more return on investment than PIMCO Short. However, IShares VII is 6.13 times more volatile than PIMCO Short Term High. It trades about 0.2 of its potential returns per unit of risk. PIMCO Short Term High is currently generating about 0.3 per unit of risk. If you would invest  3,574,000  in iShares VII PLC on April 24, 2025 and sell it today you would earn a total of  447,500  from holding iShares VII PLC or generate 12.52% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

iShares VII PLC  vs.  PIMCO Short Term High

iShares VII PLC

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in iShares VII PLC are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, IShares VII may actually be approaching a critical reversion point that can send shares even higher in August 2025.

PIMCO Short Term

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in PIMCO Short Term High are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, PIMCO Short is not utilizing all of its potentials. The newest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with IShares VII and PIMCO Short

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

The idea behind iShares VII PLC and PIMCO Short Term High 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.