Correlation Between Long-term and Pimco All
Can any of the company-specific risk be diversified away by investing in both Long-term and Pimco All 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 Long-term and Pimco All into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Long Term Government Fund and Pimco All Asset, you can compare the effects of market volatilities on Long-term and Pimco All 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 Long-term with a short position of Pimco All. Check out your portfolio center. Please also check ongoing floating volatility patterns of Long-term and Pimco All.
Diversification Opportunities for Long-term and Pimco All
Almost no diversification
The 3 months correlation between Long-term and Pimco is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Long Term Government Fund and Pimco All Asset in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco All Asset and Long-term 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 Long Term Government Fund are associated (or correlated) with Pimco All. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco All Asset has no effect on the direction of Long-term i.e., Long-term and Pimco All go up and down completely randomly.
Pair Corralation between Long-term and Pimco All
Assuming the 90 days horizon Long Term Government Fund is expected to under-perform the Pimco All. In addition to that, Long-term is 2.04 times more volatile than Pimco All Asset. It trades about -0.06 of its total potential returns per unit of risk. Pimco All Asset is currently generating about -0.02 per unit of volatility. If you would invest 663.00 in Pimco All Asset on September 2, 2024 and sell it today you would lose (3.00) from holding Pimco All Asset or give up 0.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Long Term Government Fund vs. Pimco All Asset
Performance |
| Timeline |
| Long Term Government |
| Pimco All Asset |
Long-term and Pimco All Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Long-term and Pimco All
The main advantage of trading using opposite Long-term and Pimco All positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Long-term position performs unexpectedly, Pimco All 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 All will offset losses from the drop in Pimco All's long position.| Long-term vs. Western Asset Diversified | Long-term vs. Aqr Sustainable Long Short | Long-term vs. Harbor Diversified International | Long-term vs. Vanguard Developed Markets |
| Pimco All vs. Columbia Small Cap | Pimco All vs. Vanguard Small Cap Value | Pimco All vs. Fidelity Small Cap | Pimco All vs. Heartland Value Plus |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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