Correlation Between Pimco Trends and Kopernik Global

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Can any of the company-specific risk be diversified away by investing in both Pimco Trends and Kopernik Global 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 Trends and Kopernik Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pimco Trends Managed and Kopernik Global All Cap, you can compare the effects of market volatilities on Pimco Trends and Kopernik Global 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 Trends with a short position of Kopernik Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco Trends and Kopernik Global.

Diversification Opportunities for Pimco Trends and Kopernik Global

PimcoKopernikDiversified AwayPimcoKopernikDiversified Away100%
-0.72
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Pimco and Kopernik is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Trends Managed and Kopernik Global All Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kopernik Global All and Pimco Trends 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 Trends Managed are associated (or correlated) with Kopernik Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kopernik Global All has no effect on the direction of Pimco Trends i.e., Pimco Trends and Kopernik Global go up and down completely randomly.

Pair Corralation between Pimco Trends and Kopernik Global

Assuming the 90 days horizon Pimco Trends Managed is expected to under-perform the Kopernik Global. But the mutual fund apears to be less risky and, when comparing its historical volatility, Pimco Trends Managed is 1.21 times less risky than Kopernik Global. The mutual fund trades about -0.06 of its potential returns per unit of risk. The Kopernik Global All Cap is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  1,112  in Kopernik Global All Cap on November 21, 2024 and sell it today you would earn a total of  75.00  from holding Kopernik Global All Cap or generate 6.74% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy99.56%
ValuesDaily Returns

Pimco Trends Managed  vs.  Kopernik Global All Cap

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -6-4-2024
JavaScript chart by amCharts 3.21.15PQTNX KGGAX
       Timeline  
Pimco Trends Managed 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Pimco Trends Managed has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Pimco Trends is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb10.110.210.310.4
Kopernik Global All 

Risk-Adjusted Performance

Weak

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Kopernik Global All Cap are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Kopernik Global is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb1111.111.211.311.411.511.611.711.8

Pimco Trends and Kopernik Global Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-1.83-1.36-0.89-0.420.010.450.921.391.86 0.20.40.60.81.01.2
JavaScript chart by amCharts 3.21.15PQTNX KGGAX
       Returns  

Pair Trading with Pimco Trends and Kopernik Global

The main advantage of trading using opposite Pimco Trends and Kopernik Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco Trends position performs unexpectedly, Kopernik Global 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 Kopernik Global will offset losses from the drop in Kopernik Global's long position.
The idea behind Pimco Trends Managed and Kopernik Global All Cap pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.

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