Correlation Between Fidelity® Government and Pimco Income

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

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

Diversification Opportunities for Fidelity® Government and Pimco Income

0.0

Correlation Coefficient

Fidelity® Government  Pimco Income

Pay attention - limited upside

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

Pair Corralation between Fidelity® Government and Pimco Income

If you would invest  100.00  in Fidelity Government Money on October 12, 2024 and sell it today you would earn a total of  0.00  from holding Fidelity Government Money or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	95.08%
Values	Daily Returns

Fidelity Government Money  vs.  Pimco Income Fund

Fidelity Government Money

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pimco Income

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Fidelity® Government and Pimco Income

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

The idea behind Fidelity Government Money and Pimco Income Fund 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.

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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.