Correlation Between Pimco Em and Real Return
Can any of the company-specific risk be diversified away by investing in both Pimco Em and Real Return 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 Em and Real Return into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pimco Em Fundamental and Real Return Asset, you can compare the effects of market volatilities on Pimco Em and Real Return 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 Em with a short position of Real Return. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco Em and Real Return.
Diversification Opportunities for Pimco Em and Real Return
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Pimco and Real is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Em Fundamental and Real Return Asset in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Real Return Asset and Pimco Em 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 Em Fundamental are associated (or correlated) with Real Return. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Real Return Asset has no effect on the direction of Pimco Em i.e., Pimco Em and Real Return go up and down completely randomly.
Pair Corralation between Pimco Em and Real Return
Assuming the 90 days horizon Pimco Em is expected to generate 13.12 times less return on investment than Real Return. In addition to that, Pimco Em is 1.01 times more volatile than Real Return Asset. It trades about 0.02 of its total potential returns per unit of risk. Real Return Asset is currently generating about 0.26 per unit of volatility. If you would invest 1,181 in Real Return Asset on November 30, 2024 and sell it today you would earn a total of 58.00 from holding Real Return Asset or generate 4.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pimco Em Fundamental vs. Real Return Asset
Performance |
| Timeline |
| Pimco Em Fundamental |
| Real Return Asset |
Pimco Em and Real Return Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pimco Em and Real Return
The main advantage of trading using opposite Pimco Em and Real Return positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco Em position performs unexpectedly, Real Return 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 Real Return will offset losses from the drop in Real Return's long position.| Pimco Em vs. Wilmington Diversified Income | Pimco Em vs. Global Diversified Income | Pimco Em vs. Fidelity Advisor Diversified | Pimco Em vs. Massmutual Premier Diversified |
| Real Return vs. Gnma Fund Institutional | Real Return vs. Investment Grade Porate | Real Return vs. Long Term Government Fund | Real Return vs. Pimco Em Fundamental |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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