Correlation Between Pimco International and Pimco Fundamental
Can any of the company-specific risk be diversified away by investing in both Pimco International 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 International 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 International Bond and Pimco Fundamental Advantage, you can compare the effects of market volatilities on Pimco International 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 International with a short position of Pimco Fundamental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco International and Pimco Fundamental.
Diversification Opportunities for Pimco International and Pimco Fundamental
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Pimco and Pimco is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Pimco International Bond 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 International 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 International Bond 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 International i.e., Pimco International and Pimco Fundamental go up and down completely randomly.
Pair Corralation between Pimco International and Pimco Fundamental
Assuming the 90 days horizon Pimco International Bond is expected to generate 1.0 times more return on investment than Pimco Fundamental. However, Pimco International Bond is 1.0 times less risky than Pimco Fundamental. It trades about 0.04 of its potential returns per unit of risk. Pimco Fundamental Advantage is currently generating about 0.02 per unit of risk. If you would invest 710.00 in Pimco International Bond on August 28, 2024 and sell it today you would earn a total of 37.00 from holding Pimco International Bond or generate 5.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.72% |
| Values | Daily Returns |
Pimco International Bond vs. Pimco Fundamental Advantage
Performance |
| Timeline |
| Pimco International Bond |
| Pimco Fundamental |
Pimco International and Pimco Fundamental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pimco International and Pimco Fundamental
The main advantage of trading using opposite Pimco International and Pimco Fundamental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco International 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 International vs. Pimco Rae Worldwide | Pimco International vs. Pimco Rae Worldwide | Pimco International vs. Pimco Rae Worldwide | Pimco International vs. Pimco Rae Worldwide |
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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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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