Correlation Between Pimco Rae and Real Return
Can any of the company-specific risk be diversified away by investing in both Pimco Rae and Real Return 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 Rae and Real Return into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pimco Rae Worldwide and Real Return Fund, you can compare the effects of market volatilities on Pimco Rae and Real Return 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 Rae with a short position of Real Return. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco Rae and Real Return.
Diversification Opportunities for Pimco Rae and Real Return
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Pimco and Real is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Rae Worldwide and Real Return Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Real Return Fund and Pimco Rae 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 Rae Worldwide are associated (or correlated) with Real Return. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Real Return Fund has no effect on the direction of Pimco Rae i.e., Pimco Rae and Real Return go up and down completely randomly.
Pair Corralation between Pimco Rae and Real Return
Assuming the 90 days horizon Pimco Rae is expected to generate 1.1 times less return on investment than Real Return. In addition to that, Pimco Rae is 1.55 times more volatile than Real Return Fund. It trades about 0.1 of its total potential returns per unit of risk. Real Return Fund is currently generating about 0.18 per unit of volatility. If you would invest 993.00 in Real Return Fund on October 20, 2024 and sell it today you would earn a total of 9.00 from holding Real Return Fund or generate 0.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pimco Rae Worldwide vs. Real Return Fund
Performance |
| Timeline |
| Pimco Rae Worldwide |
| Real Return Fund |
Pimco Rae and Real Return Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pimco Rae and Real Return
The main advantage of trading using opposite Pimco Rae and Real Return positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco Rae position performs unexpectedly, Real Return 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 Real Return will offset losses from the drop in Real Return's long position.| Pimco Rae vs. Advent Claymore Convertible | Pimco Rae vs. Mainstay Vertible Fund | Pimco Rae vs. Rationalpier 88 Convertible | Pimco Rae vs. Victory Incore Investment |
| Real Return vs. Gnma Fund Institutional | Real Return vs. Investment Grade Porate | Real Return vs. Long Term Government Fund | Real Return vs. Pimco Em Fundamental |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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