Correlation Between Gmo Global and Pimco Inflation
Can any of the company-specific risk be diversified away by investing in both Gmo Global and Pimco Inflation 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 Gmo Global and Pimco Inflation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gmo Global Equity and Pimco Inflation Response, you can compare the effects of market volatilities on Gmo Global and Pimco Inflation 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 Gmo Global with a short position of Pimco Inflation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gmo Global and Pimco Inflation.
Diversification Opportunities for Gmo Global and Pimco Inflation
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Gmo and Pimco is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Gmo Global Equity and Pimco Inflation Response in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco Inflation Response and Gmo Global 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 Gmo Global Equity are associated (or correlated) with Pimco Inflation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco Inflation Response has no effect on the direction of Gmo Global i.e., Gmo Global and Pimco Inflation go up and down completely randomly.
Pair Corralation between Gmo Global and Pimco Inflation
Assuming the 90 days horizon Gmo Global is expected to generate 2.63 times less return on investment than Pimco Inflation. In addition to that, Gmo Global is 1.59 times more volatile than Pimco Inflation Response. It trades about 0.03 of its total potential returns per unit of risk. Pimco Inflation Response is currently generating about 0.13 per unit of volatility. If you would invest 832.00 in Pimco Inflation Response on September 12, 2024 and sell it today you would earn a total of 7.00 from holding Pimco Inflation Response or generate 0.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gmo Global Equity vs. Pimco Inflation Response
Performance |
| Timeline |
| Gmo Global Equity |
| Pimco Inflation Response |
Gmo Global and Pimco Inflation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gmo Global and Pimco Inflation
The main advantage of trading using opposite Gmo Global and Pimco Inflation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gmo Global position performs unexpectedly, Pimco Inflation 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 Inflation will offset losses from the drop in Pimco Inflation's long position.| Gmo Global vs. Aig Government Money | Gmo Global vs. Franklin Adjustable Government | Gmo Global vs. Sit Government Securities | Gmo Global vs. Goldman Sachs Government |
| Pimco Inflation vs. Touchstone International Equity | Pimco Inflation vs. Ms Global Fixed | Pimco Inflation vs. Dodge International Stock | Pimco Inflation vs. Gmo Global Equity |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
Other Complementary Tools
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope |