Correlation Between FedEx and PIMCO RAFI
Can any of the company-specific risk be diversified away by investing in both FedEx and PIMCO RAFI 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 FedEx and PIMCO RAFI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FedEx and PIMCO RAFI Dynamic, you can compare the effects of market volatilities on FedEx and PIMCO RAFI 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 FedEx with a short position of PIMCO RAFI. Check out your portfolio center. Please also check ongoing floating volatility patterns of FedEx and PIMCO RAFI.
Diversification Opportunities for FedEx and PIMCO RAFI
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between FedEx and PIMCO is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding FedEx and PIMCO RAFI Dynamic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PIMCO RAFI Dynamic and FedEx 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 FedEx are associated (or correlated) with PIMCO RAFI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PIMCO RAFI Dynamic has no effect on the direction of FedEx i.e., FedEx and PIMCO RAFI go up and down completely randomly.
Pair Corralation between FedEx and PIMCO RAFI
Considering the 90-day investment horizon FedEx is expected to under-perform the PIMCO RAFI. In addition to that, FedEx is 1.81 times more volatile than PIMCO RAFI Dynamic. It trades about -0.16 of its total potential returns per unit of risk. PIMCO RAFI Dynamic is currently generating about -0.1 per unit of volatility. If you would invest 1,939 in PIMCO RAFI Dynamic on January 24, 2024 and sell it today you would lose (30.00) from holding PIMCO RAFI Dynamic or give up 1.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FedEx vs. PIMCO RAFI Dynamic
Performance |
| Timeline |
| FedEx |
| PIMCO RAFI Dynamic |
FedEx and PIMCO RAFI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FedEx and PIMCO RAFI
The main advantage of trading using opposite FedEx and PIMCO RAFI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FedEx position performs unexpectedly, PIMCO RAFI 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 RAFI will offset losses from the drop in PIMCO RAFI's long position.| FedEx vs. JB Hunt Transport | FedEx vs. Aquagold International | FedEx vs. Thrivent High Yield | FedEx vs. Morningstar Unconstrained Allocation |
| PIMCO RAFI vs. Pfizer Inc | PIMCO RAFI vs. LSI Industries | PIMCO RAFI vs. Retirement Living Through | PIMCO RAFI vs. HP Inc |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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