Correlation Between Pimco Short and Government Securities
Can any of the company-specific risk be diversified away by investing in both Pimco Short and Government Securities 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 Short and Government Securities into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pimco Short Term Fund and Government Securities Fund, you can compare the effects of market volatilities on Pimco Short and Government Securities 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 Short with a short position of Government Securities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco Short and Government Securities.
Diversification Opportunities for Pimco Short and Government Securities
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Pimco and Government is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Short Term Fund and Government Securities Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Government Securities and Pimco Short 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 Short Term Fund are associated (or correlated) with Government Securities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Government Securities has no effect on the direction of Pimco Short i.e., Pimco Short and Government Securities go up and down completely randomly.
Pair Corralation between Pimco Short and Government Securities
Assuming the 90 days horizon Pimco Short Term Fund is expected to generate 0.3 times more return on investment than Government Securities. However, Pimco Short Term Fund is 3.39 times less risky than Government Securities. It trades about 0.24 of its potential returns per unit of risk. Government Securities Fund is currently generating about 0.05 per unit of risk. If you would invest 891.00 in Pimco Short Term Fund on September 12, 2024 and sell it today you would earn a total of 76.00 from holding Pimco Short Term Fund or generate 8.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pimco Short Term Fund vs. Government Securities Fund
Performance |
| Timeline |
| Pimco Short Term |
| Government Securities |
Pimco Short and Government Securities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pimco Short and Government Securities
The main advantage of trading using opposite Pimco Short and Government Securities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco Short position performs unexpectedly, Government Securities 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 Government Securities will offset losses from the drop in Government Securities' long position.| Pimco Short vs. SCOR PK | Pimco Short vs. Morningstar Unconstrained Allocation | Pimco Short vs. Via Renewables | Pimco Short vs. Bondbloxx ETF Trust |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
Other Complementary Tools
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments |