Correlation Between Pimco Fundamental and Gnma Fund
Can any of the company-specific risk be diversified away by investing in both Pimco Fundamental and Gnma Fund 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 Fundamental and Gnma Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pimco Fundamental Advantage and Gnma Fund Institutional, you can compare the effects of market volatilities on Pimco Fundamental and Gnma Fund 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 Fundamental with a short position of Gnma Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco Fundamental and Gnma Fund.
Diversification Opportunities for Pimco Fundamental and Gnma Fund
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Pimco and Gnma is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Fundamental Advantage and Gnma Fund Institutional in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gnma Fund Institutional and Pimco Fundamental 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 Fundamental Advantage are associated (or correlated) with Gnma Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gnma Fund Institutional has no effect on the direction of Pimco Fundamental i.e., Pimco Fundamental and Gnma Fund go up and down completely randomly.
Pair Corralation between Pimco Fundamental and Gnma Fund
Assuming the 90 days horizon Pimco Fundamental Advantage is expected to generate 1.67 times more return on investment than Gnma Fund. However, Pimco Fundamental is 1.67 times more volatile than Gnma Fund Institutional. It trades about 0.09 of its potential returns per unit of risk. Gnma Fund Institutional is currently generating about 0.14 per unit of risk. If you would invest 789.00 in Pimco Fundamental Advantage on September 1, 2024 and sell it today you would earn a total of 9.00 from holding Pimco Fundamental Advantage or generate 1.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pimco Fundamental Advantage vs. Gnma Fund Institutional
Performance |
| Timeline |
| Pimco Fundamental |
| Gnma Fund Institutional |
Pimco Fundamental and Gnma Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pimco Fundamental and Gnma Fund
The main advantage of trading using opposite Pimco Fundamental and Gnma Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco Fundamental position performs unexpectedly, Gnma Fund 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 Gnma Fund will offset losses from the drop in Gnma Fund's long position.| Pimco Fundamental vs. Touchstone Premium Yield | Pimco Fundamental vs. Ultra Short Fixed Income | Pimco Fundamental vs. Dreyfusstandish Global Fixed | Pimco Fundamental vs. Ab Bond Inflation |
| Gnma Fund vs. Pimco Rae Worldwide | Gnma Fund vs. Pimco Rae Worldwide | Gnma Fund vs. Pimco Rae Worldwide | Gnma Fund 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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