Correlation Between Pimco Short and American Funds

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Can any of the company-specific risk be diversified away by investing in both Pimco Short and American Funds 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 Short and American Funds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pimco Short Asset and American Funds 2010, you can compare the effects of market volatilities on Pimco Short and American Funds 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 Short with a short position of American Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco Short and American Funds.

Diversification Opportunities for Pimco Short and American Funds

-0.1
  Correlation Coefficient

Good diversification

The 3 months correlation between Pimco and American is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding PIMCO SHORT ASSET and AMERICAN FUNDS 2010 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Funds 2010 and Pimco Short 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 Short Asset are associated (or correlated) with American Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Funds 2010 has no effect on the direction of Pimco Short i.e., Pimco Short and American Funds go up and down completely randomly.

Pair Corralation between Pimco Short and American Funds

If you would invest  1,132  in American Funds 2010 on December 3, 2023 and sell it today you would earn a total of  7.00  from holding American Funds 2010 or generate 0.62% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy95.45%
ValuesDaily Returns

PIMCO SHORT ASSET  vs.  AMERICAN FUNDS 2010

 Performance 
       Timeline  
Pimco Short Asset 

Risk-Adjusted Performance

14 of 100

 
Low
 
High
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Pimco Short Asset are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Pimco Short is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
American Funds 2010 

Risk-Adjusted Performance

3 of 100

 
Low
 
High
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in American Funds 2010 are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, American Funds is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pimco Short and American Funds Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Pimco Short and American Funds

The main advantage of trading using opposite Pimco Short and American Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco Short position performs unexpectedly, American Funds 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 American Funds will offset losses from the drop in American Funds' long position.
The idea behind Pimco Short Asset and American Funds 2010 pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.

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