Correlation Between PIMCO Short and UBSFund Solutions

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

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

Diversification Opportunities for PIMCO Short and UBSFund Solutions

0.74

Correlation Coefficient

PIMCO Short  UBSFund Solutions

Poor diversification

The 3 months correlation between PIMCO and UBSFund is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding PIMCO Short Term High and UBSFund Solutions MSCI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UBSFund Solutions MSCI and PIMCO Short 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 Short Term High are associated (or correlated) with UBSFund Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UBSFund Solutions MSCI has no effect on the direction of PIMCO Short i.e., PIMCO Short and UBSFund Solutions go up and down completely randomly.

Pair Corralation between PIMCO Short and UBSFund Solutions

Assuming the 90 days trading horizon PIMCO Short is expected to generate 2.04 times less return on investment than UBSFund Solutions. But when comparing it to its historical volatility, PIMCO Short Term High is 4.7 times less risky than UBSFund Solutions. It trades about 0.29 of its potential returns per unit of risk. UBSFund Solutions MSCI is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  426.00  in UBSFund Solutions MSCI on April 24, 2025 and sell it today you would earn a total of  25.00  from holding UBSFund Solutions MSCI or generate 5.87% return on investment over 90 days.

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

PIMCO Short Term High  vs.  UBSFund Solutions MSCI

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.

UBSFund Solutions MSCI

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in UBSFund Solutions MSCI are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, UBSFund Solutions is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with PIMCO Short and UBSFund Solutions

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

The idea behind PIMCO Short Term High and UBSFund Solutions MSCI 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.