Correlation Between Pimco Total and Intermediate-term
Can any of the company-specific risk be diversified away by investing in both Pimco Total and Intermediate-term 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 Intermediate-term 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 Intermediate Term Bond Fund, you can compare the effects of market volatilities on Pimco Total and Intermediate-term 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 Intermediate-term. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco Total and Intermediate-term.
Diversification Opportunities for Pimco Total and Intermediate-term
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Pimco and Intermediate-term is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Total Return and Intermediate Term Bond Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intermediate Term 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 Intermediate-term. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intermediate Term Bond has no effect on the direction of Pimco Total i.e., Pimco Total and Intermediate-term go up and down completely randomly.
Pair Corralation between Pimco Total and Intermediate-term
Assuming the 90 days horizon Pimco Total Return is expected to generate 1.11 times more return on investment than Intermediate-term. However, Pimco Total is 1.11 times more volatile than Intermediate Term Bond Fund. It trades about 0.1 of its potential returns per unit of risk. Intermediate Term Bond Fund is currently generating about 0.11 per unit of risk. If you would invest 856.00 in Pimco Total Return on August 31, 2024 and sell it today you would earn a total of 7.00 from holding Pimco Total Return or generate 0.82% 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. Intermediate Term Bond Fund
Performance |
| Timeline |
| Pimco Total Return |
| Intermediate Term Bond |
Pimco Total and Intermediate-term Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pimco Total and Intermediate-term
The main advantage of trading using opposite Pimco Total and Intermediate-term positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco Total position performs unexpectedly, Intermediate-term 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 Intermediate-term will offset losses from the drop in Intermediate-term's long position.| Pimco Total vs. Gmo High Yield | Pimco Total vs. Dunham High Yield | Pimco Total vs. Mesirow Financial High | Pimco Total vs. Alpine High Yield |
| Intermediate-term vs. Metropolitan West Total | Intermediate-term vs. Metropolitan West Total | Intermediate-term vs. Pimco Total Return | Intermediate-term 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
Other Complementary Tools
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon |