Correlation Between Pimco Total and Fuhkbx
Can any of the company-specific risk be diversified away by investing in both Pimco Total and Fuhkbx 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 Total and Fuhkbx into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pimco Total Return and Fuhkbx, you can compare the effects of market volatilities on Pimco Total and Fuhkbx 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 Total with a short position of Fuhkbx. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco Total and Fuhkbx.
Diversification Opportunities for Pimco Total and Fuhkbx
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Pimco and Fuhkbx is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Total Return and Fuhkbx in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fuhkbx and Pimco Total 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 Total Return are associated (or correlated) with Fuhkbx. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fuhkbx has no effect on the direction of Pimco Total i.e., Pimco Total and Fuhkbx go up and down completely randomly.
Pair Corralation between Pimco Total and Fuhkbx
Assuming the 90 days horizon Pimco Total Return is expected to under-perform the Fuhkbx. But the mutual fund apears to be less risky and, when comparing its historical volatility, Pimco Total Return is 1.81 times less risky than Fuhkbx. The mutual fund trades about -0.02 of its potential returns per unit of risk. The Fuhkbx is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest 967.00 in Fuhkbx on October 26, 2024 and sell it today you would earn a total of 39.00 from holding Fuhkbx or generate 4.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 30.51% |
| Values | Daily Returns |
Pimco Total Return vs. Fuhkbx
Performance |
| Timeline |
| Pimco Total Return |
| Fuhkbx |
Pimco Total and Fuhkbx Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pimco Total and Fuhkbx
The main advantage of trading using opposite Pimco Total and Fuhkbx positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco Total position performs unexpectedly, Fuhkbx 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 Fuhkbx will offset losses from the drop in Fuhkbx's long position.The idea behind Pimco Total Return and Fuhkbx 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.| Fuhkbx vs. Delaware Investments Ultrashort | Fuhkbx vs. Cmg Ultra Short | Fuhkbx vs. Transam Short Term Bond | Fuhkbx vs. Aamhimco Short Duration |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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