Correlation Between International Fund and Pimco Commoditiesplus
Can any of the company-specific risk be diversified away by investing in both International Fund and Pimco Commoditiesplus 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 International Fund and Pimco Commoditiesplus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between International Fund International and Pimco Moditiesplus Strategy, you can compare the effects of market volatilities on International Fund and Pimco Commoditiesplus 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 International Fund with a short position of Pimco Commoditiesplus. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Fund and Pimco Commoditiesplus.
Diversification Opportunities for International Fund and Pimco Commoditiesplus
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between International and Pimco is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding International Fund Internation and Pimco Moditiesplus Strategy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco Commoditiesplus and International Fund 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 International Fund International are associated (or correlated) with Pimco Commoditiesplus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco Commoditiesplus has no effect on the direction of International Fund i.e., International Fund and Pimco Commoditiesplus go up and down completely randomly.
Pair Corralation between International Fund and Pimco Commoditiesplus
Assuming the 90 days horizon International Fund International is expected to generate 0.7 times more return on investment than Pimco Commoditiesplus. However, International Fund International is 1.43 times less risky than Pimco Commoditiesplus. It trades about 0.07 of its potential returns per unit of risk. Pimco Moditiesplus Strategy is currently generating about 0.02 per unit of risk. If you would invest 3,223 in International Fund International on August 26, 2024 and sell it today you would earn a total of 473.00 from holding International Fund International or generate 14.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
International Fund Internation vs. Pimco Moditiesplus Strategy
Performance |
| Timeline |
| International Fund |
| Pimco Commoditiesplus |
International Fund and Pimco Commoditiesplus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Fund and Pimco Commoditiesplus
The main advantage of trading using opposite International Fund and Pimco Commoditiesplus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Fund position performs unexpectedly, Pimco Commoditiesplus 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 Commoditiesplus will offset losses from the drop in Pimco Commoditiesplus' long position.| International Fund vs. Pimco Moditiesplus Strategy | International Fund vs. The Brown Capital | International Fund vs. Goldman Sachs International | International Fund vs. Cohen Steers Real |
| Pimco Commoditiesplus vs. Pimco Rae Worldwide | Pimco Commoditiesplus vs. Pimco Rae Worldwide | Pimco Commoditiesplus vs. Pimco Rae Worldwide | Pimco Commoditiesplus vs. Pimco Rae Worldwide |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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