Correlation Between RiverFront Dynamic and PIMCO RAFI
Can any of the company-specific risk be diversified away by investing in both RiverFront Dynamic and PIMCO RAFI 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 RiverFront Dynamic and PIMCO RAFI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RiverFront Dynamic Flex Cap and PIMCO RAFI ESG, you can compare the effects of market volatilities on RiverFront Dynamic and PIMCO RAFI 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 RiverFront Dynamic with a short position of PIMCO RAFI. Check out your portfolio center. Please also check ongoing floating volatility patterns of RiverFront Dynamic and PIMCO RAFI.
Diversification Opportunities for RiverFront Dynamic and PIMCO RAFI
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between RiverFront and PIMCO is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding RiverFront Dynamic Flex Cap and PIMCO RAFI ESG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PIMCO RAFI ESG and RiverFront Dynamic 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 RiverFront Dynamic Flex Cap are associated (or correlated) with PIMCO RAFI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PIMCO RAFI ESG has no effect on the direction of RiverFront Dynamic i.e., RiverFront Dynamic and PIMCO RAFI go up and down completely randomly.
Pair Corralation between RiverFront Dynamic and PIMCO RAFI
Given the investment horizon of 90 days RiverFront Dynamic Flex Cap is expected to generate 1.04 times more return on investment than PIMCO RAFI. However, RiverFront Dynamic is 1.04 times more volatile than PIMCO RAFI ESG. It trades about 0.12 of its potential returns per unit of risk. PIMCO RAFI ESG is currently generating about 0.08 per unit of risk. If you would invest 4,911 in RiverFront Dynamic Flex Cap on November 3, 2024 and sell it today you would earn a total of 1,128 from holding RiverFront Dynamic Flex Cap or generate 22.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.6% |
| Values | Daily Returns |
RiverFront Dynamic Flex Cap vs. PIMCO RAFI ESG
Performance |
| Timeline |
| RiverFront Dynamic Flex |
| PIMCO RAFI ESG |
RiverFront Dynamic and PIMCO RAFI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RiverFront Dynamic and PIMCO RAFI
The main advantage of trading using opposite RiverFront Dynamic and PIMCO RAFI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RiverFront Dynamic position performs unexpectedly, PIMCO RAFI 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 RAFI will offset losses from the drop in PIMCO RAFI's long position.| RiverFront Dynamic vs. RiverFront Dynamic Dividend | RiverFront Dynamic vs. RiverFront Dynamic Core | RiverFront Dynamic vs. Hartford Multifactor Equity | RiverFront Dynamic vs. Hartford Multifactor Emerging |
| PIMCO RAFI vs. IQ Candriam ESG | PIMCO RAFI vs. Nuveen ESG Large Cap | PIMCO RAFI vs. Xtrackers MSCI EAFE | PIMCO RAFI vs. Xtrackers SP 500 |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
Other Complementary Tools
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities |