Correlation Between Pimco Dynamic and Forum Funds

Can any of the company-specific risk be diversified away by investing in both Pimco Dynamic and Forum Funds 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 Dynamic and Forum Funds into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Pimco Dynamic Income and Forum Funds , you can compare the effects of market volatilities on Pimco Dynamic and Forum Funds 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 Dynamic with a short position of Forum Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco Dynamic and Forum Funds.

Diversification Opportunities for Pimco Dynamic and Forum Funds

0.78

Correlation Coefficient

Pimco Dynamic  Forum Funds

Poor diversification

The 3 months correlation between Pimco and Forum is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Dynamic Income and Forum Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Forum Funds and Pimco Dynamic 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 Dynamic Income are associated (or correlated) with Forum Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Forum Funds has no effect on the direction of Pimco Dynamic i.e., Pimco Dynamic and Forum Funds go up and down completely randomly.

Pair Corralation between Pimco Dynamic and Forum Funds

Considering the 90-day investment horizon Pimco Dynamic Income is expected to generate 3.1 times more return on investment than Forum Funds. However, Pimco Dynamic is 3.1 times more volatile than Forum Funds . It trades about 0.46 of its potential returns per unit of risk. Forum Funds is currently generating about 0.15 per unit of risk. If you would invest  1,775  in Pimco Dynamic Income on December 20, 2024 and sell it today you would earn a total of  207.00  from holding Pimco Dynamic Income or generate 11.66% return on investment over 90 days.

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

Pimco Dynamic Income  vs.  Forum Funds

Pimco Dynamic Income

Risk-Adjusted Performance

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Pimco Dynamic Income are ranked lower than 36 (%) of all funds and portfolios of funds over the last 90 days. Despite fairly unfluctuating fundamental indicators, Pimco Dynamic may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Forum Funds

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Forum Funds are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Forum Funds 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 Dynamic and Forum Funds

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

The idea behind Pimco Dynamic Income and Forum Funds 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.