Correlation Between Pimco Total and Performance Trust
Can any of the company-specific risk be diversified away by investing in both Pimco Total and Performance Trust 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 Performance Trust 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 Performance Trust Strategic, you can compare the effects of market volatilities on Pimco Total and Performance Trust 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 Performance Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco Total and Performance Trust.
Diversification Opportunities for Pimco Total and Performance Trust
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Pimco and Performance is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Total Return and Performance Trust Strategic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Performance Trust 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 Performance Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Performance Trust has no effect on the direction of Pimco Total i.e., Pimco Total and Performance Trust go up and down completely randomly.
Pair Corralation between Pimco Total and Performance Trust
Assuming the 90 days horizon Pimco Total is expected to generate 1.19 times less return on investment than Performance Trust. In addition to that, Pimco Total is 1.23 times more volatile than Performance Trust Strategic. It trades about 0.04 of its total potential returns per unit of risk. Performance Trust Strategic is currently generating about 0.06 per unit of volatility. If you would invest 1,796 in Performance Trust Strategic on August 30, 2024 and sell it today you would earn a total of 197.00 from holding Performance Trust Strategic or generate 10.97% 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. Performance Trust Strategic
Performance |
| Timeline |
| Pimco Total Return |
| Performance Trust |
Pimco Total and Performance Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pimco Total and Performance Trust
The main advantage of trading using opposite Pimco Total and Performance Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco Total position performs unexpectedly, Performance Trust 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 Performance Trust will offset losses from the drop in Performance Trust's long position.| Pimco Total vs. Ab Municipal Bond | Pimco Total vs. Aqr Managed Futures | Pimco Total vs. The Hartford Inflation | Pimco Total vs. The Hartford Inflation |
| Performance Trust vs. Ab Global Risk | Performance Trust vs. Massmutual Premier Global | Performance Trust vs. Wisdomtree Siegel Global | Performance Trust vs. Ab Global Bond |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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