Correlation Between Pimco Fundamental and Pimco Short-term
Can any of the company-specific risk be diversified away by investing in both Pimco Fundamental and Pimco Short-term 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 Short-term 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 Short Term Fund, you can compare the effects of market volatilities on Pimco Fundamental and Pimco Short-term 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 Short-term. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco Fundamental and Pimco Short-term.
Diversification Opportunities for Pimco Fundamental and Pimco Short-term
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Pimco and PIMCO is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Fundamental Advantage and Pimco Short Term Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco Short Term 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 Short-term. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco Short Term has no effect on the direction of Pimco Fundamental i.e., Pimco Fundamental and Pimco Short-term go up and down completely randomly.
Pair Corralation between Pimco Fundamental and Pimco Short-term
Assuming the 90 days horizon Pimco Fundamental Advantage is expected to under-perform the Pimco Short-term. In addition to that, Pimco Fundamental is 6.12 times more volatile than Pimco Short Term Fund. It trades about -0.07 of its total potential returns per unit of risk. Pimco Short Term Fund is currently generating about 0.17 per unit of volatility. If you would invest 960.00 in Pimco Short Term Fund on August 30, 2024 and sell it today you would earn a total of 6.00 from holding Pimco Short Term Fund or generate 0.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pimco Fundamental Advantage vs. Pimco Short Term Fund
Performance |
| Timeline |
| Pimco Fundamental |
| Pimco Short Term |
Pimco Fundamental and Pimco Short-term Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pimco Fundamental and Pimco Short-term
The main advantage of trading using opposite Pimco Fundamental and Pimco Short-term positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco Fundamental position performs unexpectedly, Pimco Short-term 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 Short-term will offset losses from the drop in Pimco Short-term's long position.| Pimco Fundamental vs. Locorr Dynamic Equity | Pimco Fundamental vs. Gmo Global Equity | Pimco Fundamental vs. Ultra Short Fixed Income | Pimco Fundamental vs. Balanced Fund Retail |
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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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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