Correlation Between Foreign Bond and Pimco Foreign
Can any of the company-specific risk be diversified away by investing in both Foreign Bond and Pimco Foreign 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 Foreign Bond and Pimco Foreign into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Foreign Bond Fund and Pimco Foreign Bond, you can compare the effects of market volatilities on Foreign Bond and Pimco Foreign 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 Foreign Bond with a short position of Pimco Foreign. Check out your portfolio center. Please also check ongoing floating volatility patterns of Foreign Bond and Pimco Foreign.
Diversification Opportunities for Foreign Bond and Pimco Foreign
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Foreign and Pimco is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Foreign Bond Fund and Pimco Foreign Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco Foreign Bond and Foreign Bond 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 Foreign Bond Fund are associated (or correlated) with Pimco Foreign. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco Foreign Bond has no effect on the direction of Foreign Bond i.e., Foreign Bond and Pimco Foreign go up and down completely randomly.
Pair Corralation between Foreign Bond and Pimco Foreign
Assuming the 90 days horizon Foreign Bond Fund is expected to under-perform the Pimco Foreign. In addition to that, Foreign Bond is 3.06 times more volatile than Pimco Foreign Bond. It trades about -0.01 of its total potential returns per unit of risk. Pimco Foreign Bond is currently generating about 0.39 per unit of volatility. If you would invest 988.00 in Pimco Foreign Bond on September 1, 2024 and sell it today you would earn a total of 14.00 from holding Pimco Foreign Bond or generate 1.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Foreign Bond Fund vs. Pimco Foreign Bond
Performance |
| Timeline |
| Foreign Bond |
| Pimco Foreign Bond |
Foreign Bond and Pimco Foreign Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Foreign Bond and Pimco Foreign
The main advantage of trading using opposite Foreign Bond and Pimco Foreign positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Foreign Bond position performs unexpectedly, Pimco Foreign 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 Foreign will offset losses from the drop in Pimco Foreign's long position.| Foreign Bond vs. Volumetric Fund Volumetric | Foreign Bond vs. Omni Small Cap Value | Foreign Bond vs. Vanguard Small Cap Growth | Foreign Bond vs. Eic Value Fund |
| Pimco Foreign vs. Foreign Bond Fund | Pimco Foreign vs. Emerging Markets Bond | Pimco Foreign vs. High Yield Fund | Pimco Foreign vs. Low Duration Fund |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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