Correlation Between Pimco Emerging and Global Bond
Can any of the company-specific risk be diversified away by investing in both Pimco Emerging and Global Bond 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 Emerging and Global Bond into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pimco Emerging Markets and Global Bond Fund, you can compare the effects of market volatilities on Pimco Emerging and Global Bond 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 Emerging with a short position of Global Bond. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco Emerging and Global Bond.
Diversification Opportunities for Pimco Emerging and Global Bond
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Pimco and Global is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Emerging Markets and Global Bond Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Bond Fund and Pimco Emerging 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 Emerging Markets are associated (or correlated) with Global Bond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Bond Fund has no effect on the direction of Pimco Emerging i.e., Pimco Emerging and Global Bond go up and down completely randomly.
Pair Corralation between Pimco Emerging and Global Bond
Assuming the 90 days horizon Pimco Emerging Markets is expected to generate 1.58 times more return on investment than Global Bond. However, Pimco Emerging is 1.58 times more volatile than Global Bond Fund. It trades about 0.08 of its potential returns per unit of risk. Global Bond Fund is currently generating about 0.1 per unit of risk. If you would invest 536.00 in Pimco Emerging Markets on August 31, 2024 and sell it today you would earn a total of 72.00 from holding Pimco Emerging Markets or generate 13.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pimco Emerging Markets vs. Global Bond Fund
Performance |
| Timeline |
| Pimco Emerging Markets |
| Global Bond Fund |
Pimco Emerging and Global Bond Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pimco Emerging and Global Bond
The main advantage of trading using opposite Pimco Emerging and Global Bond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco Emerging position performs unexpectedly, Global Bond 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 Global Bond will offset losses from the drop in Global Bond's long position.| Pimco Emerging vs. Fidelity Advisor Gold | Pimco Emerging vs. Gabelli Gold Fund | Pimco Emerging vs. Oppenheimer Gold Special | Pimco Emerging vs. Gold And Precious |
| Global Bond vs. Columbia Real Estate | Global Bond vs. Jhancock Real Estate | Global Bond vs. Forum Real Estate | Global Bond vs. Goldman Sachs Real |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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