Correlation Between Pimco Preferred and Gnma Fund
Can any of the company-specific risk be diversified away by investing in both Pimco Preferred 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 Preferred 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 Preferred And and Gnma Fund C, you can compare the effects of market volatilities on Pimco Preferred 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 Preferred with a short position of Gnma Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco Preferred and Gnma Fund.
Diversification Opportunities for Pimco Preferred and Gnma Fund
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Pimco and Gnma is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Preferred And and Gnma Fund C in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gnma Fund C and Pimco Preferred 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 Preferred And 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 C has no effect on the direction of Pimco Preferred i.e., Pimco Preferred and Gnma Fund go up and down completely randomly.
Pair Corralation between Pimco Preferred and Gnma Fund
Assuming the 90 days horizon Pimco Preferred And is expected to generate 0.51 times more return on investment than Gnma Fund. However, Pimco Preferred And is 1.98 times less risky than Gnma Fund. It trades about 0.13 of its potential returns per unit of risk. Gnma Fund C is currently generating about 0.04 per unit of risk. If you would invest 920.00 in Pimco Preferred And on November 3, 2024 and sell it today you would earn a total of 5.00 from holding Pimco Preferred And or generate 0.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pimco Preferred And vs. Gnma Fund C
Performance |
| Timeline |
| Pimco Preferred And |
| Gnma Fund C |
Pimco Preferred and Gnma Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pimco Preferred and Gnma Fund
The main advantage of trading using opposite Pimco Preferred and Gnma Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco Preferred 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 Preferred vs. Barings High Yield | Pimco Preferred vs. Chartwell Short Duration | Pimco Preferred vs. Transamerica High Yield | Pimco Preferred vs. Gugg Actv Invmt |
| Gnma Fund vs. Aamhimco Short Duration | Gnma Fund vs. Transam Short Term Bond | Gnma Fund vs. Nuveen Short Term | Gnma Fund vs. Siit Ultra Short |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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