Correlation Between Gnma Fund and Pimco International
Can any of the company-specific risk be diversified away by investing in both Gnma Fund and Pimco International 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 International 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 International Stocksplus, you can compare the effects of market volatilities on Gnma Fund and Pimco International 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 International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gnma Fund and Pimco International.
Diversification Opportunities for Gnma Fund and Pimco International
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Gnma and Pimco is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Gnma Fund A and Pimco International Stocksplus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco International 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 International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco International has no effect on the direction of Gnma Fund i.e., Gnma Fund and Pimco International go up and down completely randomly.
Pair Corralation between Gnma Fund and Pimco International
Assuming the 90 days horizon Gnma Fund is expected to generate 2.15 times less return on investment than Pimco International. But when comparing it to its historical volatility, Gnma Fund A is 1.95 times less risky than Pimco International. It trades about 0.23 of its potential returns per unit of risk. Pimco International Stocksplus is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 787.00 in Pimco International Stocksplus on November 27, 2024 and sell it today you would earn a total of 24.00 from holding Pimco International Stocksplus or generate 3.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gnma Fund A vs. Pimco International Stocksplus
Performance |
| Timeline |
| Gnma Fund A |
| Pimco International |
Gnma Fund and Pimco International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gnma Fund and Pimco International
The main advantage of trading using opposite Gnma Fund and Pimco International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gnma Fund position performs unexpectedly, Pimco International 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 International will offset losses from the drop in Pimco International's long position.| Gnma Fund vs. Voya Government Money | Gnma Fund vs. Transamerica Funds | Gnma Fund vs. Pace Select Advisors | Gnma Fund vs. Prudential Emerging Markets |
| Pimco International vs. Pimco Small Cap | Pimco International vs. Fundamental Indexplus Tr | Pimco International vs. Stocksplus Total Return | Pimco International vs. Investment Grade Porate |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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