Correlation Between Pimco Floating and Pimco Fundamental
Can any of the company-specific risk be diversified away by investing in both Pimco Floating and Pimco Fundamental 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 Floating and Pimco Fundamental into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pimco Floating Income and Pimco Fundamental Advantage, you can compare the effects of market volatilities on Pimco Floating and Pimco Fundamental 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 Floating with a short position of Pimco Fundamental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco Floating and Pimco Fundamental.
Diversification Opportunities for Pimco Floating and Pimco Fundamental
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Pimco and Pimco is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Floating Income and Pimco Fundamental Advantage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco Fundamental and Pimco Floating 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 Floating Income are associated (or correlated) with Pimco Fundamental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco Fundamental has no effect on the direction of Pimco Floating i.e., Pimco Floating and Pimco Fundamental go up and down completely randomly.
Pair Corralation between Pimco Floating and Pimco Fundamental
Assuming the 90 days horizon Pimco Floating is expected to generate 1.34 times less return on investment than Pimco Fundamental. But when comparing it to its historical volatility, Pimco Floating Income is 3.8 times less risky than Pimco Fundamental. It trades about 0.26 of its potential returns per unit of risk. Pimco Fundamental Advantage is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 789.00 in Pimco Fundamental Advantage on September 1, 2024 and sell it today you would earn a total of 9.00 from holding Pimco Fundamental Advantage or generate 1.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pimco Floating Income vs. Pimco Fundamental Advantage
Performance |
| Timeline |
| Pimco Floating Income |
| Pimco Fundamental |
Pimco Floating and Pimco Fundamental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pimco Floating and Pimco Fundamental
The main advantage of trading using opposite Pimco Floating and Pimco Fundamental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco Floating position performs unexpectedly, Pimco Fundamental 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 Fundamental will offset losses from the drop in Pimco Fundamental's long position.| Pimco Floating vs. Short Term Fund A | Pimco Floating vs. Pimco Income Fund | Pimco Floating vs. Pimco Foreign Bond | Pimco Floating vs. All Asset Fund |
| Pimco Fundamental vs. Touchstone Premium Yield | Pimco Fundamental vs. Ultra Short Fixed Income | Pimco Fundamental vs. Dreyfusstandish Global Fixed | Pimco Fundamental vs. Ab Bond Inflation |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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