Correlation Between Pimco International and Fundamental Indexplus

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

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

Diversification Opportunities for Pimco International and Fundamental Indexplus

0.67

Correlation Coefficient

Pimco International  Fundamental Indexplus

Poor diversification

The 3 months correlation between Pimco and Fundamental is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Pimco International Stocksplus and Fundamental Indexplus Tr in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fundamental Indexplus and Pimco International 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 International Stocksplus are associated (or correlated) with Fundamental Indexplus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fundamental Indexplus has no effect on the direction of Pimco International i.e., Pimco International and Fundamental Indexplus go up and down completely randomly.

Pair Corralation between Pimco International and Fundamental Indexplus

Assuming the 90 days horizon Pimco International is expected to generate 2.86 times less return on investment than Fundamental Indexplus. But when comparing it to its historical volatility, Pimco International Stocksplus is 1.21 times less risky than Fundamental Indexplus. It trades about 0.11 of its potential returns per unit of risk. Fundamental Indexplus Tr is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest  1,576  in Fundamental Indexplus Tr on April 25, 2025 and sell it today you would earn a total of  230.00  from holding Fundamental Indexplus Tr or generate 14.59% return on investment over 90 days.

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

Pimco International Stocksplus  vs.  Fundamental Indexplus Tr

Pimco International

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Pimco International Stocksplus are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Pimco International is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Fundamental Indexplus

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Fundamental Indexplus Tr are ranked lower than 20 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Fundamental Indexplus showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Pimco International and Fundamental Indexplus

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

The idea behind Pimco International Stocksplus and Fundamental Indexplus 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.