Correlation Between Pimco Energy and Guidepath Tactical

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

By analyzing existing cross correlation between Pimco Energy Tactical and Guidepath Tactical Allocation, you can compare the effects of market volatilities on Pimco Energy and Guidepath Tactical 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 Energy with a short position of Guidepath Tactical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco Energy and Guidepath Tactical.

Diversification Opportunities for Pimco Energy and Guidepath Tactical

0.72

Correlation Coefficient

Pimco Energy  Guidepath Tactical

Poor diversification

The 3 months correlation between Pimco and Guidepath is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Energy Tactical and Guidepath Tactical Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guidepath Tactical and Pimco Energy 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 Energy Tactical are associated (or correlated) with Guidepath Tactical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guidepath Tactical has no effect on the direction of Pimco Energy i.e., Pimco Energy and Guidepath Tactical go up and down completely randomly.

Pair Corralation between Pimco Energy and Guidepath Tactical

Considering the 90-day investment horizon Pimco Energy Tactical is expected to generate 1.69 times more return on investment than Guidepath Tactical. However, Pimco Energy is 1.69 times more volatile than Guidepath Tactical Allocation. It trades about 0.2 of its potential returns per unit of risk. Guidepath Tactical Allocation is currently generating about 0.14 per unit of risk. If you would invest  2,167  in Pimco Energy Tactical on May 10, 2025 and sell it today you would earn a total of  290.00  from holding Pimco Energy Tactical or generate 13.38% return on investment over 90 days.

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

Pimco Energy Tactical  vs.  Guidepath Tactical Allocation

Pimco Energy Tactical

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Pimco Energy Tactical are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Pimco Energy showed solid returns over the last few months and may actually be approaching a breakup point.

Guidepath Tactical

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Guidepath Tactical Allocation are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Guidepath Tactical 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 Energy and Guidepath Tactical

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

The idea behind Pimco Energy Tactical and Guidepath Tactical Allocation 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.