Correlation Between Pimco Rae and Gnma Fund
Can any of the company-specific risk be diversified away by investing in both Pimco Rae and Gnma Fund 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 Gnma Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pimco Rae Plus and Gnma Fund Institutional, you can compare the effects of market volatilities on Pimco Rae and Gnma Fund 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 Gnma Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco Rae and Gnma Fund.
Diversification Opportunities for Pimco Rae and Gnma Fund
Very good diversification
The 3 months correlation between Pimco and Gnma is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Rae Plus and Gnma Fund Institutional in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gnma Fund Institutional 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 Plus are associated (or correlated) with Gnma Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gnma Fund Institutional has no effect on the direction of Pimco Rae i.e., Pimco Rae and Gnma Fund go up and down completely randomly.
Pair Corralation between Pimco Rae and Gnma Fund
Assuming the 90 days horizon Pimco Rae Plus is expected to generate 2.8 times more return on investment than Gnma Fund. However, Pimco Rae is 2.8 times more volatile than Gnma Fund Institutional. It trades about 0.31 of its potential returns per unit of risk. Gnma Fund Institutional is currently generating about 0.14 per unit of risk. If you would invest 1,915 in Pimco Rae Plus on September 1, 2024 and sell it today you would earn a total of 126.00 from holding Pimco Rae Plus or generate 6.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pimco Rae Plus vs. Gnma Fund Institutional
Performance |
| Timeline |
| Pimco Rae Plus |
| Gnma Fund Institutional |
Pimco Rae and Gnma Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pimco Rae and Gnma Fund
The main advantage of trading using opposite Pimco Rae and Gnma Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco Rae position performs unexpectedly, Gnma Fund 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 Gnma Fund will offset losses from the drop in Gnma Fund's long position.| Pimco Rae vs. Pimco Rae Worldwide | Pimco Rae vs. Pimco Rae Worldwide | Pimco Rae vs. Pimco Rae Worldwide | Pimco Rae vs. Pimco Rae Worldwide |
| Gnma Fund vs. Pimco Rae Worldwide | Gnma Fund vs. Pimco Rae Worldwide | Gnma Fund vs. Pimco Rae Worldwide | Gnma Fund vs. Pimco Rae Worldwide |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
Other Complementary Tools
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance |