Correlation Between Pimco Fundamental and Cognios Market
Can any of the company-specific risk be diversified away by investing in both Pimco Fundamental and Cognios Market 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 Fundamental and Cognios Market into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pimco Fundamental Advantage and Cognios Market Neutral, you can compare the effects of market volatilities on Pimco Fundamental and Cognios Market 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 Fundamental with a short position of Cognios Market. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco Fundamental and Cognios Market.
Diversification Opportunities for Pimco Fundamental and Cognios Market
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Pimco and Cognios is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Fundamental Advantage and Cognios Market Neutral in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cognios Market Neutral and Pimco Fundamental 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 Fundamental Advantage are associated (or correlated) with Cognios Market. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cognios Market Neutral has no effect on the direction of Pimco Fundamental i.e., Pimco Fundamental and Cognios Market go up and down completely randomly.
Pair Corralation between Pimco Fundamental and Cognios Market
Assuming the 90 days horizon Pimco Fundamental Advantage is expected to under-perform the Cognios Market. But the mutual fund apears to be less risky and, when comparing its historical volatility, Pimco Fundamental Advantage is 1.12 times less risky than Cognios Market. The mutual fund trades about -0.01 of its potential returns per unit of risk. The Cognios Market Neutral is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,136 in Cognios Market Neutral on September 1, 2024 and sell it today you would earn a total of 131.00 from holding Cognios Market Neutral or generate 11.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.78% |
| Values | Daily Returns |
Pimco Fundamental Advantage vs. Cognios Market Neutral
Performance |
| Timeline |
| Pimco Fundamental |
| Cognios Market Neutral |
Pimco Fundamental and Cognios Market Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pimco Fundamental and Cognios Market
The main advantage of trading using opposite Pimco Fundamental and Cognios Market positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco Fundamental position performs unexpectedly, Cognios Market 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 Cognios Market will offset losses from the drop in Cognios Market's long position.| Pimco Fundamental vs. Icon Information Technology | Pimco Fundamental vs. Dreyfus Technology Growth | Pimco Fundamental vs. Blackrock Science Technology | Pimco Fundamental vs. Technology Ultrasector Profund |
| Cognios Market vs. Aqr Long Short Equity | Cognios Market vs. Aqr Equity Market | Cognios Market vs. Cognios Market Neutral | Cognios Market vs. Aqr Managed Futures |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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