Correlation Between PIMCO Monthly and CI Gold

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

By analyzing existing cross correlation between PIMCO Monthly Income and CI Gold Bullion, you can compare the effects of market volatilities on PIMCO Monthly and CI Gold 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 Monthly with a short position of CI Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of PIMCO Monthly and CI Gold.

Diversification Opportunities for PIMCO Monthly and CI Gold

-0.52

Correlation Coefficient

PIMCO Monthly  CI Gold

Excellent diversification

The 3 months correlation between PIMCO and VALT-B is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding PIMCO Monthly Income and CI Gold Bullion in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CI Gold Bullion and PIMCO Monthly 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 Monthly Income are associated (or correlated) with CI Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CI Gold Bullion has no effect on the direction of PIMCO Monthly i.e., PIMCO Monthly and CI Gold go up and down completely randomly.

Pair Corralation between PIMCO Monthly and CI Gold

Assuming the 90 days trading horizon PIMCO Monthly Income is expected to under-perform the CI Gold. But the fund apears to be less risky and, when comparing its historical volatility, PIMCO Monthly Income is 3.64 times less risky than CI Gold. The fund trades about -0.25 of its potential returns per unit of risk. The CI Gold Bullion is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  3,570  in CI Gold Bullion on October 1, 2024 and sell it today you would earn a total of  175.00  from holding CI Gold Bullion or generate 4.9% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.39%
Values	Daily Returns

PIMCO Monthly Income  vs.  CI Gold Bullion

PIMCO Monthly Income

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PIMCO Monthly Income has generated negative risk-adjusted returns adding no value to fund investors. In spite of comparatively stable basic indicators, PIMCO Monthly is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

CI Gold Bullion

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in CI Gold Bullion are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat strong essential indicators, CI Gold 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 Monthly and CI Gold

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

The idea behind PIMCO Monthly Income and CI Gold Bullion 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.