Correlation Between Pimco Fundamental and Pimco Long
Can any of the company-specific risk be diversified away by investing in both Pimco Fundamental and Pimco Long 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 Pimco Long 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 Pimco Long Duration, you can compare the effects of market volatilities on Pimco Fundamental and Pimco Long 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 Pimco Long. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco Fundamental and Pimco Long.
Diversification Opportunities for Pimco Fundamental and Pimco Long
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Pimco and Pimco is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Fundamental Advantage and Pimco Long Duration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco Long Duration 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 Pimco Long. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco Long Duration has no effect on the direction of Pimco Fundamental i.e., Pimco Fundamental and Pimco Long go up and down completely randomly.
Pair Corralation between Pimco Fundamental and Pimco Long
Assuming the 90 days horizon Pimco Fundamental Advantage is expected to under-perform the Pimco Long. But the mutual fund apears to be less risky and, when comparing its historical volatility, Pimco Fundamental Advantage is 1.8 times less risky than Pimco Long. The mutual fund trades about -0.01 of its potential returns per unit of risk. The Pimco Long Duration is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 701.00 in Pimco Long Duration on September 2, 2024 and sell it today you would earn a total of 35.00 from holding Pimco Long Duration or generate 4.99% 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. Pimco Long Duration
Performance |
| Timeline |
| Pimco Fundamental |
| Pimco Long Duration |
Pimco Fundamental and Pimco Long Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pimco Fundamental and Pimco Long
The main advantage of trading using opposite Pimco Fundamental and Pimco Long positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco Fundamental position performs unexpectedly, Pimco Long 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 Long will offset losses from the drop in Pimco Long's long position.| Pimco Fundamental vs. Pro Blend Moderate Term | Pimco Fundamental vs. Lifestyle Ii Moderate | Pimco Fundamental vs. Fidelity Managed Retirement | Pimco Fundamental vs. Franklin Lifesmart Retirement |
| Pimco Long vs. Pimco Rae Worldwide | Pimco Long vs. Pimco Rae Worldwide | Pimco Long vs. Pimco Rae Worldwide | Pimco Long 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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