Correlation Between Pimco Stocksplus and Pimco Fundamental

Can any of the company-specific risk be diversified away by investing in both Pimco Stocksplus 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 Stocksplus 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 Stocksplus International and Pimco Fundamental Advantage, you can compare the effects of market volatilities on Pimco Stocksplus 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 Stocksplus with a short position of Pimco Fundamental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco Stocksplus and Pimco Fundamental.

Diversification Opportunities for Pimco Stocksplus and Pimco Fundamental

0.39

Correlation Coefficient

Pimco Stocksplus  Pimco Fundamental

Weak diversification

The 3 months correlation between Pimco and Pimco is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Stocksplus International 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 Stocksplus 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 Stocksplus International 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 Stocksplus i.e., Pimco Stocksplus and Pimco Fundamental go up and down completely randomly.

Pair Corralation between Pimco Stocksplus and Pimco Fundamental

Assuming the 90 days horizon Pimco Stocksplus International is expected to generate 1.58 times more return on investment than Pimco Fundamental. However, Pimco Stocksplus is 1.58 times more volatile than Pimco Fundamental Advantage. It trades about -0.27 of its potential returns per unit of risk. Pimco Fundamental Advantage is currently generating about -0.44 per unit of risk. If you would invest  850.00  in Pimco Stocksplus International on October 4, 2024 and sell it today you would lose (33.00) from holding Pimco Stocksplus International or give up 3.88% of portfolio value over 90 days.

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

Pimco Stocksplus International  vs.  Pimco Fundamental Advantage

Pimco Stocksplus Int

Risk-Adjusted Performance

0 of 100

Very Weak

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

The main advantage of trading using opposite Pimco Stocksplus and Pimco Fundamental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco Stocksplus 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 Stocksplus International 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.