Correlation Between Pimco Trends and Global Resources
Can any of the company-specific risk be diversified away by investing in both Pimco Trends and Global Resources 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 Global Resources 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 Global Resources Fund, you can compare the effects of market volatilities on Pimco Trends and Global Resources 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 Global Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco Trends and Global Resources.
Diversification Opportunities for Pimco Trends and Global Resources
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Pimco and Global is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Trends Managed and Global Resources Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Resources 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 Global Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Resources has no effect on the direction of Pimco Trends i.e., Pimco Trends and Global Resources go up and down completely randomly.
Pair Corralation between Pimco Trends and Global Resources
Assuming the 90 days horizon Pimco Trends Managed is expected to under-perform the Global Resources. But the mutual fund apears to be less risky and, when comparing its historical volatility, Pimco Trends Managed is 1.97 times less risky than Global Resources. The mutual fund trades about -0.12 of its potential returns per unit of risk. The Global Resources Fund is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 405.00 in Global Resources Fund on September 1, 2024 and sell it today you would earn a total of 9.00 from holding Global Resources Fund or generate 2.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
Pimco Trends Managed vs. Global Resources Fund
Performance |
| Timeline |
| Pimco Trends Managed |
| Global Resources |
Pimco Trends and Global Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pimco Trends and Global Resources
The main advantage of trading using opposite Pimco Trends and Global Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco Trends position performs unexpectedly, Global Resources 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 Global Resources will offset losses from the drop in Global Resources' long position.| Pimco Trends vs. Queens Road Small | Pimco Trends vs. Ab Discovery Value | Pimco Trends vs. Mutual Of America | Pimco Trends vs. American Century Etf |
| Global Resources vs. World Precious Minerals | Global Resources vs. Near Term Tax Free | Global Resources vs. Gold And Precious | Global Resources vs. Us Global Investors |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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