Correlation Between Pimco Fundamental and Total Return
Can any of the company-specific risk be diversified away by investing in both Pimco Fundamental and Total 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 Fundamental and Total Return 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 Total Return Fund, you can compare the effects of market volatilities on Pimco Fundamental and Total 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 Fundamental with a short position of Total Return. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco Fundamental and Total Return.
Diversification Opportunities for Pimco Fundamental and Total Return
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Pimco and Total is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Fundamental Advantage and Total Return Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Total Return 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 Total Return. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Total Return has no effect on the direction of Pimco Fundamental i.e., Pimco Fundamental and Total Return go up and down completely randomly.
Pair Corralation between Pimco Fundamental and Total Return
Assuming the 90 days horizon Pimco Fundamental Advantage is expected to under-perform the Total Return. In addition to that, Pimco Fundamental is 1.52 times more volatile than Total Return Fund. It trades about -0.26 of its total potential returns per unit of risk. Total Return Fund is currently generating about -0.21 per unit of volatility. If you would invest 867.00 in Total Return Fund on January 12, 2025 and sell it today you would lose (19.00) from holding Total Return Fund or give up 2.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Pimco Fundamental Advantage vs. Total Return Fund
Performance |
| Timeline |
| Pimco Fundamental |
| Total Return |
Pimco Fundamental and Total Return Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pimco Fundamental and Total Return
The main advantage of trading using opposite Pimco Fundamental and Total Return positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco Fundamental position performs unexpectedly, Total 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 Total Return will offset losses from the drop in Total Return's long position.| Pimco Fundamental vs. Fuller Thaler Behavioral | Pimco Fundamental vs. T Rowe Price | Pimco Fundamental vs. Blackrock Mid Cap Growth | Pimco Fundamental vs. Foundry Partners Fundamental |
| Total Return vs. Virtus Convertible | Total Return vs. Advent Claymore Convertible | Total Return vs. Columbia Convertible Securities | Total Return vs. Rationalpier 88 Convertible |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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