Correlation Between Pimco International and Gnma Fund
Can any of the company-specific risk be diversified away by investing in both Pimco International and Gnma Fund 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 Gnma Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pimco International Stocksplus and Gnma Fund A, you can compare the effects of market volatilities on Pimco International and Gnma Fund 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 Gnma Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco International and Gnma Fund.
Diversification Opportunities for Pimco International and Gnma Fund
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Pimco and Gnma is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Pimco International Stocksplus and Gnma Fund A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gnma Fund A 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 Stocksplus are associated (or correlated) with Gnma Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gnma Fund A has no effect on the direction of Pimco International i.e., Pimco International and Gnma Fund go up and down completely randomly.
Pair Corralation between Pimco International and Gnma Fund
Assuming the 90 days horizon Pimco International Stocksplus is expected to generate 1.95 times more return on investment than Gnma Fund. However, Pimco International is 1.95 times more volatile than Gnma Fund A. It trades about 0.25 of its potential returns per unit of risk. Gnma Fund A is currently generating about 0.23 per unit of risk. If you would invest 787.00 in Pimco International Stocksplus on November 27, 2024 and sell it today you would earn a total of 24.00 from holding Pimco International Stocksplus or generate 3.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pimco International Stocksplus vs. Gnma Fund A
Performance |
| Timeline |
| Pimco International |
| Gnma Fund A |
Pimco International and Gnma Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pimco International and Gnma Fund
The main advantage of trading using opposite Pimco International and Gnma Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco International position performs unexpectedly, Gnma Fund 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 Gnma Fund will offset losses from the drop in Gnma Fund's long position.| Pimco International vs. Pimco Small Cap | Pimco International vs. Fundamental Indexplus Tr | Pimco International vs. Stocksplus Total Return | Pimco International vs. Investment Grade Porate |
| Gnma Fund vs. Voya Government Money | Gnma Fund vs. Transamerica Funds | Gnma Fund vs. Pace Select Advisors | Gnma Fund vs. Prudential Emerging Markets |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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