Correlation Between Fundamental Indexplus and Pimco International
Can any of the company-specific risk be diversified away by investing in both Fundamental Indexplus and Pimco International 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 Fundamental Indexplus and Pimco International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fundamental Indexplus Tr and Pimco International Stocksplus, you can compare the effects of market volatilities on Fundamental Indexplus and Pimco International 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 Fundamental Indexplus with a short position of Pimco International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fundamental Indexplus and Pimco International.
Diversification Opportunities for Fundamental Indexplus and Pimco International
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fundamental and Pimco is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Fundamental Indexplus Tr and Pimco International Stocksplus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco International and Fundamental Indexplus 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 Fundamental Indexplus Tr are associated (or correlated) with Pimco International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco International has no effect on the direction of Fundamental Indexplus i.e., Fundamental Indexplus and Pimco International go up and down completely randomly.
Pair Corralation between Fundamental Indexplus and Pimco International
Assuming the 90 days horizon Fundamental Indexplus Tr is expected to generate 1.43 times more return on investment than Pimco International. However, Fundamental Indexplus is 1.43 times more volatile than Pimco International Stocksplus. It trades about 0.06 of its potential returns per unit of risk. Pimco International Stocksplus is currently generating about -0.01 per unit of risk. If you would invest 2,007 in Fundamental Indexplus Tr on August 25, 2024 and sell it today you would earn a total of 45.00 from holding Fundamental Indexplus Tr or generate 2.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fundamental Indexplus Tr vs. Pimco International Stocksplus
Performance |
| Timeline |
| Fundamental Indexplus |
| Pimco International |
Fundamental Indexplus and Pimco International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fundamental Indexplus and Pimco International
The main advantage of trading using opposite Fundamental Indexplus and Pimco International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fundamental Indexplus position performs unexpectedly, Pimco International 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 Pimco International will offset losses from the drop in Pimco International's long position.| Fundamental Indexplus vs. Pimco Em Fundamental | Fundamental Indexplus vs. Pimco Short Asset | Fundamental Indexplus vs. Pimco Small Cap | Fundamental Indexplus vs. Pimco International Stocksplus |
| Pimco International vs. Pimco Small Cap | Pimco International vs. Stocksplus Total Return | Pimco International vs. Investment Grade Porate | Pimco International vs. Pimco Income 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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