Correlation Between Pimco All and Target Managed
Can any of the company-specific risk be diversified away by investing in both Pimco All and Target Managed 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 Target Managed 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 Target Managed Allocation, you can compare the effects of market volatilities on Pimco All and Target Managed 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 Target Managed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco All and Target Managed.
Diversification Opportunities for Pimco All and Target Managed
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Pimco and Target is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Pimco All Asset and Target Managed Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Target Managed Allocation 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 Target Managed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Target Managed Allocation has no effect on the direction of Pimco All i.e., Pimco All and Target Managed go up and down completely randomly.
Pair Corralation between Pimco All and Target Managed
Assuming the 90 days horizon Pimco All is expected to generate 2.93 times less return on investment than Target Managed. But when comparing it to its historical volatility, Pimco All Asset is 1.67 times less risky than Target Managed. It trades about 0.03 of its potential returns per unit of risk. Target Managed Allocation is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 892.00 in Target Managed Allocation on September 2, 2024 and sell it today you would earn a total of 216.00 from holding Target Managed Allocation or generate 24.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pimco All Asset vs. Target Managed Allocation
Performance |
| Timeline |
| Pimco All Asset |
| Target Managed Allocation |
Pimco All and Target Managed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pimco All and Target Managed
The main advantage of trading using opposite Pimco All and Target Managed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco All position performs unexpectedly, Target Managed 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 Target Managed will offset losses from the drop in Target Managed's long position.| Pimco All vs. Pimco Rae Worldwide | Pimco All vs. Pimco Rae Worldwide | Pimco All vs. Pimco Rae Worldwide | Pimco All vs. Pimco Rae Worldwide |
| Target Managed vs. Capital Growth Fund | Target Managed vs. Emerging Markets Fund | Target Managed vs. High Income Fund | Target Managed vs. International Fund International |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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