Correlation Between Pimco Foreign and Total Return
Can any of the company-specific risk be diversified away by investing in both Pimco Foreign and Total Return 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 Foreign and Total Return into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pimco Foreign Bond and Total Return Fund, you can compare the effects of market volatilities on Pimco Foreign and Total Return 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 Foreign with a short position of Total Return. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco Foreign and Total Return.
Diversification Opportunities for Pimco Foreign and Total Return
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Pimco and Total is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Foreign Bond and Total Return Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Total Return and Pimco Foreign 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 Foreign Bond are associated (or correlated) with Total Return. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Total Return has no effect on the direction of Pimco Foreign i.e., Pimco Foreign and Total Return go up and down completely randomly.
Pair Corralation between Pimco Foreign and Total Return
Assuming the 90 days horizon Pimco Foreign Bond is expected to generate 0.54 times more return on investment than Total Return. However, Pimco Foreign Bond is 1.86 times less risky than Total Return. It trades about 0.14 of its potential returns per unit of risk. Total Return Fund is currently generating about 0.05 per unit of risk. If you would invest 895.00 in Pimco Foreign Bond on August 31, 2024 and sell it today you would earn a total of 107.00 from holding Pimco Foreign Bond or generate 11.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pimco Foreign Bond vs. Total Return Fund
Performance |
| Timeline |
| Pimco Foreign Bond |
| Total Return |
Pimco Foreign and Total Return Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pimco Foreign and Total Return
The main advantage of trading using opposite Pimco Foreign and Total Return positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco Foreign position performs unexpectedly, Total Return 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 Total Return will offset losses from the drop in Total Return's long position.| Pimco Foreign vs. Strategic Allocation Moderate | Pimco Foreign vs. Pro Blend Moderate Term | Pimco Foreign vs. Blackrock Moderate Prepared | Pimco Foreign vs. Wisdomtree Siegel Moderate |
| Total Return vs. Queens Road Small | Total Return vs. Lord Abbett Small | Total Return vs. Hennessy Nerstone Mid | Total Return vs. Fidelity Small Cap |
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.
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