Correlation Between Gnma Fund and Pimco Commoditiesplus
Can any of the company-specific risk be diversified away by investing in both Gnma 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 Gnma 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 Gnma Fund A and Pimco Moditiesplus Strategy, you can compare the effects of market volatilities on Gnma 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 Gnma Fund with a short position of Pimco Commoditiesplus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gnma Fund and Pimco Commoditiesplus.
Diversification Opportunities for Gnma Fund and Pimco Commoditiesplus
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Gnma and Pimco is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Gnma Fund A and Pimco Moditiesplus Strategy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco Commoditiesplus and Gnma 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 Gnma Fund A 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 Gnma Fund i.e., Gnma Fund and Pimco Commoditiesplus go up and down completely randomly.
Pair Corralation between Gnma Fund and Pimco Commoditiesplus
Assuming the 90 days horizon Gnma Fund A is expected to generate 0.32 times more return on investment than Pimco Commoditiesplus. However, Gnma Fund A is 3.08 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 910.00 in Gnma Fund A on September 1, 2024 and sell it today you would earn a total of 27.00 from holding Gnma Fund A or generate 2.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.21% |
| Values | Daily Returns |
Gnma Fund A vs. Pimco Moditiesplus Strategy
Performance |
| Timeline |
| Gnma Fund A |
| Pimco Commoditiesplus |
Gnma Fund and Pimco Commoditiesplus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gnma Fund and Pimco Commoditiesplus
The main advantage of trading using opposite Gnma Fund and Pimco Commoditiesplus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gnma 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.| Gnma Fund vs. Pimco Rae Worldwide | Gnma Fund vs. Pimco Rae Worldwide | Gnma Fund vs. Pimco Rae Worldwide | Gnma Fund vs. Pimco Rae Worldwide |
| 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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