Correlation Between Pimco All and Kensington Dynamic
Can any of the company-specific risk be diversified away by investing in both Pimco All and Kensington Dynamic 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 Pimco All and Kensington Dynamic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pimco All Asset and Kensington Dynamic Growth, you can compare the effects of market volatilities on Pimco All and Kensington Dynamic 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 Pimco All with a short position of Kensington Dynamic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco All and Kensington Dynamic.
Diversification Opportunities for Pimco All and Kensington Dynamic
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between PIMCO and Kensington is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Pimco All Asset and Kensington Dynamic Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kensington Dynamic Growth and Pimco All 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 Pimco All Asset are associated (or correlated) with Kensington Dynamic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kensington Dynamic Growth has no effect on the direction of Pimco All i.e., Pimco All and Kensington Dynamic go up and down completely randomly.
Pair Corralation between Pimco All and Kensington Dynamic
Assuming the 90 days horizon Pimco All Asset is expected to generate 0.41 times more return on investment than Kensington Dynamic. However, Pimco All Asset is 2.43 times less risky than Kensington Dynamic. It trades about 0.1 of its potential returns per unit of risk. Kensington Dynamic Growth is currently generating about -0.06 per unit of risk. If you would invest 1,074 in Pimco All Asset on August 31, 2024 and sell it today you would earn a total of 48.00 from holding Pimco All Asset or generate 4.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pimco All Asset vs. Kensington Dynamic Growth
Performance |
| Timeline |
| Pimco All Asset |
| Kensington Dynamic Growth |
Pimco All and Kensington Dynamic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pimco All and Kensington Dynamic
The main advantage of trading using opposite Pimco All and Kensington Dynamic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco All position performs unexpectedly, Kensington Dynamic 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 Kensington Dynamic will offset losses from the drop in Kensington Dynamic's long position.| Pimco All vs. All Asset Fund | Pimco All vs. All Asset Fund | Pimco All vs. All Asset Fund | Pimco All vs. Pimco All Asset |
| Kensington Dynamic vs. All Asset Fund | Kensington Dynamic vs. Pimco All Asset | Kensington Dynamic vs. All Asset Fund | Kensington Dynamic vs. All Asset 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
Other Complementary Tools
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA |