Correlation Between Long-term and Pimco Trends
Can any of the company-specific risk be diversified away by investing in both Long-term and Pimco Trends 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 Trends 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 Trends Managed, you can compare the effects of market volatilities on Long-term and Pimco Trends 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 Trends. Check out your portfolio center. Please also check ongoing floating volatility patterns of Long-term and Pimco Trends.
Diversification Opportunities for Long-term and Pimco Trends
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Long-term and Pimco is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Long Term Government Fund and Pimco Trends Managed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco Trends Managed 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 Trends. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco Trends Managed has no effect on the direction of Long-term i.e., Long-term and Pimco Trends go up and down completely randomly.
Pair Corralation between Long-term and Pimco Trends
Assuming the 90 days horizon Long Term Government Fund is expected to generate 1.63 times more return on investment than Pimco Trends. However, Long-term is 1.63 times more volatile than Pimco Trends Managed. It trades about 0.0 of its potential returns per unit of risk. Pimco Trends Managed is currently generating about -0.04 per unit of risk. If you would invest 1,468 in Long Term Government Fund on August 31, 2024 and sell it today you would lose (18.00) from holding Long Term Government Fund or give up 1.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Long Term Government Fund vs. Pimco Trends Managed
Performance |
| Timeline |
| Long Term Government |
| Pimco Trends Managed |
Long-term and Pimco Trends Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Long-term and Pimco Trends
The main advantage of trading using opposite Long-term and Pimco Trends positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Long-term position performs unexpectedly, Pimco Trends 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 Trends will offset losses from the drop in Pimco Trends' long position.| Long-term vs. Wisdomtree Siegel Global | Long-term vs. Us Global Investors | Long-term vs. Wasatch Global Opportunities | Long-term vs. Kinetics Global Fund |
| Pimco Trends vs. Doubleline Emerging Markets | Pimco Trends vs. Calvert Developed Market | Pimco Trends vs. Barings Emerging Markets | Pimco Trends vs. Origin Emerging Markets |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
Other Complementary Tools
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format |