Correlation Between Short-term Fund and Pimco Total
Can any of the company-specific risk be diversified away by investing in both Short-term Fund and Pimco Total 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 Short-term Fund and Pimco Total into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Short Term Fund C and Pimco Total Return, you can compare the effects of market volatilities on Short-term Fund and Pimco Total 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 Short-term Fund with a short position of Pimco Total. Check out your portfolio center. Please also check ongoing floating volatility patterns of Short-term Fund and Pimco Total.
Diversification Opportunities for Short-term Fund and Pimco Total
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Short-term and Pimco is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Short Term Fund C and Pimco Total Return in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco Total Return and Short-term Fund 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 Short Term Fund C are associated (or correlated) with Pimco Total. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco Total Return has no effect on the direction of Short-term Fund i.e., Short-term Fund and Pimco Total go up and down completely randomly.
Pair Corralation between Short-term Fund and Pimco Total
Assuming the 90 days horizon Short-term Fund is expected to generate 1.31 times less return on investment than Pimco Total. But when comparing it to its historical volatility, Short Term Fund C is 4.08 times less risky than Pimco Total. It trades about 0.23 of its potential returns per unit of risk. Pimco Total Return is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 811.00 in Pimco Total Return on September 3, 2024 and sell it today you would earn a total of 55.00 from holding Pimco Total Return or generate 6.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Short Term Fund C vs. Pimco Total Return
Performance |
| Timeline |
| Short Term Fund |
| Pimco Total Return |
Short-term Fund and Pimco Total Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Short-term Fund and Pimco Total
The main advantage of trading using opposite Short-term Fund and Pimco Total positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Short-term Fund position performs unexpectedly, Pimco Total 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 Total will offset losses from the drop in Pimco Total's long position.| Short-term Fund vs. Blackrock Science Technology | Short-term Fund vs. Global Technology Portfolio | Short-term Fund vs. Allianzgi Technology Fund | Short-term Fund vs. Biotechnology Ultrasector Profund |
| Pimco Total vs. Commodities Strategy Fund | Pimco Total vs. Balanced Fund Investor | Pimco Total vs. Omni Small Cap Value | Pimco Total vs. Nasdaq 100 Fund Class |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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