Correlation Between Oil Gas and Pimco Fundamental
Can any of the company-specific risk be diversified away by investing in both Oil Gas 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 Oil Gas and Pimco Fundamental into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oil Gas Ultrasector and Pimco Fundamental Advantage, you can compare the effects of market volatilities on Oil Gas 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 Oil Gas with a short position of Pimco Fundamental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oil Gas and Pimco Fundamental.
Diversification Opportunities for Oil Gas and Pimco Fundamental
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Oil and Pimco is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Oil Gas Ultrasector and Pimco Fundamental Advantage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco Fundamental and Oil Gas 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 Oil Gas Ultrasector 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 Oil Gas i.e., Oil Gas and Pimco Fundamental go up and down completely randomly.
Pair Corralation between Oil Gas and Pimco Fundamental
Assuming the 90 days horizon Oil Gas Ultrasector is expected to generate 3.96 times more return on investment than Pimco Fundamental. However, Oil Gas is 3.96 times more volatile than Pimco Fundamental Advantage. It trades about 0.04 of its potential returns per unit of risk. Pimco Fundamental Advantage is currently generating about 0.02 per unit of risk. If you would invest 3,191 in Oil Gas Ultrasector on September 2, 2024 and sell it today you would earn a total of 817.00 from holding Oil Gas Ultrasector or generate 25.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oil Gas Ultrasector vs. Pimco Fundamental Advantage
Performance |
| Timeline |
| Oil Gas Ultrasector |
| Pimco Fundamental |
Oil Gas and Pimco Fundamental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oil Gas and Pimco Fundamental
The main advantage of trading using opposite Oil Gas and Pimco Fundamental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oil Gas 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.| Oil Gas vs. Precious Metals Ultrasector | Oil Gas vs. Real Estate Ultrasector | Oil Gas vs. Basic Materials Ultrasector | Oil Gas vs. Utilities Ultrasector Profund |
| Pimco Fundamental vs. Oppenheimer Gold Special | Pimco Fundamental vs. Short Precious Metals | Pimco Fundamental vs. Precious Metals And | Pimco Fundamental vs. Global Gold 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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