Correlation Between Pimco Foreign and Real Return
Can any of the company-specific risk be diversified away by investing in both Pimco Foreign and Real 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 Real 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 Real Return Fund, you can compare the effects of market volatilities on Pimco Foreign and Real 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 Real Return. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco Foreign and Real Return.
Diversification Opportunities for Pimco Foreign and Real Return
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Pimco and Real is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Foreign Bond and Real Return Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Real Return Fund 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 Real Return. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Real Return Fund has no effect on the direction of Pimco Foreign i.e., Pimco Foreign and Real Return go up and down completely randomly.
Pair Corralation between Pimco Foreign and Real Return
Assuming the 90 days horizon Pimco Foreign Bond is expected to generate 1.25 times more return on investment than Real Return. However, Pimco Foreign is 1.25 times more volatile than Real Return Fund. It trades about 0.06 of its potential returns per unit of risk. Real Return Fund is currently generating about 0.07 per unit of risk. If you would invest 697.00 in Pimco Foreign Bond on September 12, 2024 and sell it today you would earn a total of 60.00 from holding Pimco Foreign Bond or generate 8.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pimco Foreign Bond vs. Real Return Fund
Performance |
| Timeline |
| Pimco Foreign Bond |
| Real Return Fund |
Pimco Foreign and Real Return Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pimco Foreign and Real Return
The main advantage of trading using opposite Pimco Foreign and Real Return positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco Foreign position performs unexpectedly, Real 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 Real Return will offset losses from the drop in Real Return's long position.| Pimco Foreign vs. Champlain Mid Cap | Pimco Foreign vs. Smallcap Growth Fund | Pimco Foreign vs. L Abbett Growth | Pimco Foreign vs. Pace Smallmedium Growth |
| Real Return vs. Vanguard Inflation Protected Securities | Real Return vs. Vanguard Inflation Protected Securities | Real Return vs. American Funds Inflation | Real Return vs. American Funds Inflation |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Complementary Tools
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges |