Correlation Between Pimco Total and Fidelity Total
Can any of the company-specific risk be diversified away by investing in both Pimco Total and Fidelity Total 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 Fidelity Total 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 Fidelity Total Bond, you can compare the effects of market volatilities on Pimco Total and Fidelity Total 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 Fidelity Total. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco Total and Fidelity Total.
Diversification Opportunities for Pimco Total and Fidelity Total
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Pimco and Fidelity is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Total Return and Fidelity Total Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Total Bond 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 Fidelity Total. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Total Bond has no effect on the direction of Pimco Total i.e., Pimco Total and Fidelity Total go up and down completely randomly.
Pair Corralation between Pimco Total and Fidelity Total
Assuming the 90 days horizon Pimco Total is expected to generate 1.08 times less return on investment than Fidelity Total. In addition to that, Pimco Total is 1.08 times more volatile than Fidelity Total Bond. It trades about 0.04 of its total potential returns per unit of risk. Fidelity Total Bond is currently generating about 0.05 per unit of volatility. If you would invest 880.00 in Fidelity Total Bond on September 3, 2024 and sell it today you would earn a total of 79.00 from holding Fidelity Total Bond or generate 8.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pimco Total Return vs. Fidelity Total Bond
Performance |
| Timeline |
| Pimco Total Return |
| Fidelity Total Bond |
Pimco Total and Fidelity Total Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pimco Total and Fidelity Total
The main advantage of trading using opposite Pimco Total and Fidelity Total positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco Total position performs unexpectedly, Fidelity Total 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 Fidelity Total will offset losses from the drop in Fidelity Total's long position.| Pimco Total vs. Multisector Bond Sma | Pimco Total vs. California Bond Fund | Pimco Total vs. Ab Bond Inflation | Pimco Total vs. Versatile Bond Portfolio |
| Fidelity Total vs. Metropolitan West Total | Fidelity Total vs. Metropolitan West Total | Fidelity Total vs. Pimco Total Return | Fidelity Total vs. Total Return Fund |
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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