Correlation Between Pimco International and Fundamental Indexplus
Can any of the company-specific risk be diversified away by investing in both Pimco International and Fundamental Indexplus 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 International and Fundamental Indexplus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pimco International Stocksplus and Fundamental Indexplus Tr, you can compare the effects of market volatilities on Pimco International and Fundamental Indexplus 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 International with a short position of Fundamental Indexplus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco International and Fundamental Indexplus.
Diversification Opportunities for Pimco International and Fundamental Indexplus
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Pimco and Fundamental is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Pimco International Stocksplus and Fundamental Indexplus Tr in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fundamental Indexplus and Pimco International 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 International Stocksplus are associated (or correlated) with Fundamental Indexplus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fundamental Indexplus has no effect on the direction of Pimco International i.e., Pimco International and Fundamental Indexplus go up and down completely randomly.
Pair Corralation between Pimco International and Fundamental Indexplus
Assuming the 90 days horizon Pimco International Stocksplus is expected to generate 0.87 times more return on investment than Fundamental Indexplus. However, Pimco International Stocksplus is 1.15 times less risky than Fundamental Indexplus. It trades about 0.16 of its potential returns per unit of risk. Fundamental Indexplus Tr is currently generating about 0.0 per unit of risk. If you would invest 788.00 in Pimco International Stocksplus on December 5, 2024 and sell it today you would earn a total of 17.00 from holding Pimco International Stocksplus or generate 2.16% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Pimco International Stocksplus vs. Fundamental Indexplus Tr
Performance |
Timeline |
Pimco International |
Fundamental Indexplus |
Pimco International and Fundamental Indexplus Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Pimco International and Fundamental Indexplus
The main advantage of trading using opposite Pimco International and Fundamental Indexplus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco International position performs unexpectedly, Fundamental Indexplus 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 Fundamental Indexplus will offset losses from the drop in Fundamental Indexplus' long position.Pimco International vs. Pimco Small Cap | Pimco International vs. Fundamental Indexplus Tr | Pimco International vs. Stocksplus Total Return | Pimco International vs. Investment Grade Porate |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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