Correlation Between Pimco Capital and Pimco Fundamental

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

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

Diversification Opportunities for Pimco Capital and Pimco Fundamental

0.0

Correlation Coefficient

Pimco Capital  Pimco Fundamental

Pay attention - limited upside

The 3 months correlation between Pimco and Pimco is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Capital Sec and Pimco Fundamental Advantage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco Fundamental and Pimco Capital 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 Capital Sec are associated (or correlated) with Pimco Fundamental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco Fundamental has no effect on the direction of Pimco Capital i.e., Pimco Capital and Pimco Fundamental go up and down completely randomly.

Pair Corralation between Pimco Capital and Pimco Fundamental

If you would invest (100.00) in Pimco Fundamental Advantage on October 10, 2024 and sell it today you would earn a total of  100.00  from holding Pimco Fundamental Advantage or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Pimco Capital Sec  vs.  Pimco Fundamental Advantage

Pimco Capital Sec

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pimco Capital Sec has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Pimco Capital is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pimco Fundamental

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pimco Fundamental Advantage has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Pimco Fundamental 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 Capital and Pimco Fundamental

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

The idea behind Pimco Capital Sec and Pimco Fundamental Advantage 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.