Correlation Between Pimco California and Dfa Ca

Can any of the company-specific risk be diversified away by investing in both Pimco California and Dfa Ca 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 California and Dfa Ca into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Pimco California Municipal and Dfa Ca Int Tr, you can compare the effects of market volatilities on Pimco California and Dfa Ca 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 California with a short position of Dfa Ca. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco California and Dfa Ca.

Diversification Opportunities for Pimco California and Dfa Ca

0.95

Correlation Coefficient

Pimco California  Dfa Ca

Almost no diversification

The 3 months correlation between Pimco and Dfa is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Pimco California Municipal and Dfa Ca Int Tr in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dfa Ca Int and Pimco California 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 California Municipal are associated (or correlated) with Dfa Ca. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dfa Ca Int has no effect on the direction of Pimco California i.e., Pimco California and Dfa Ca go up and down completely randomly.

Pair Corralation between Pimco California and Dfa Ca

Assuming the 90 days horizon Pimco California Municipal is expected to generate 1.72 times more return on investment than Dfa Ca. However, Pimco California is 1.72 times more volatile than Dfa Ca Int Tr. It trades about 0.39 of its potential returns per unit of risk. Dfa Ca Int Tr is currently generating about 0.31 per unit of risk. If you would invest  1,029  in Pimco California Municipal on August 3, 2025 and sell it today you would earn a total of  46.00  from holding Pimco California Municipal or generate 4.47% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Pimco California Municipal  vs.  Dfa Ca Int Tr

Pimco California Mun

Risk-Adjusted Performance

High

Compared to the overall equity markets, risk-adjusted returns on investments in Pimco California Municipal are ranked lower than 31 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Pimco California is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Dfa Ca Int

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Dfa Ca Int Tr are ranked lower than 24 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental drivers, Dfa Ca is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Pimco California and Dfa Ca

The main advantage of trading using opposite Pimco California and Dfa Ca positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco California position performs unexpectedly, Dfa Ca 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 Dfa Ca will offset losses from the drop in Dfa Ca's long position.

The idea behind Pimco California Municipal and Dfa Ca Int Tr 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.

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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.