Correlation Between Pimco Funds and American Funds
Can any of the company-specific risk be diversified away by investing in both Pimco Funds and American 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 Funds and American Funds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pimco Funds and American Funds 2010, you can compare the effects of market volatilities on Pimco Funds and American 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 Funds with a short position of American Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco Funds and American Funds.
Diversification Opportunities for Pimco Funds and American Funds
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between PIMCO and American is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Funds and American Funds 2010 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Funds 2010 and Pimco Funds 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 Funds are associated (or correlated) with American Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Funds 2010 has no effect on the direction of Pimco Funds i.e., Pimco Funds and American Funds go up and down completely randomly.
Pair Corralation between Pimco Funds and American Funds
If you would invest 1,218 in American Funds 2010 on September 2, 2024 and sell it today you would earn a total of 22.00 from holding American Funds 2010 or generate 1.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pimco Funds vs. American Funds 2010
Performance |
| Timeline |
| Pimco Funds |
| American Funds 2010 |
Pimco Funds and American Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pimco Funds and American Funds
The main advantage of trading using opposite Pimco Funds and American Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco Funds position performs unexpectedly, American 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 American Funds will offset losses from the drop in American Funds' long position.| Pimco Funds vs. Vanguard Total Stock | Pimco Funds vs. Vanguard 500 Index | Pimco Funds vs. Vanguard Total Stock | Pimco Funds vs. Vanguard Total Stock |
| American Funds vs. Income Fund Of | American Funds vs. New World Fund | American Funds vs. American Mutual Fund | American Funds vs. American Mutual Fund |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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