Correlation Between Pimco Rae and Fundamental Indexplus

Can any of the company-specific risk be diversified away by investing in both Pimco Rae 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 Rae 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 Rae Plus and Fundamental Indexplus Tr, you can compare the effects of market volatilities on Pimco Rae 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 Rae with a short position of Fundamental Indexplus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco Rae and Fundamental Indexplus.

Diversification Opportunities for Pimco Rae and Fundamental Indexplus

1.0

Correlation Coefficient

Pimco Rae  Fundamental Indexplus

No risk reduction

The 3 months correlation between Pimco and Fundamental is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Rae Plus 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 Rae 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 Rae Plus 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 Rae i.e., Pimco Rae and Fundamental Indexplus go up and down completely randomly.

Pair Corralation between Pimco Rae and Fundamental Indexplus

Assuming the 90 days horizon Pimco Rae Plus is expected to generate 0.99 times more return on investment than Fundamental Indexplus. However, Pimco Rae Plus is 1.01 times less risky than Fundamental Indexplus. It trades about 0.15 of its potential returns per unit of risk. Fundamental Indexplus Tr is currently generating about 0.15 per unit of risk. If you would invest  1,782  in Pimco Rae Plus on May 4, 2025 and sell it today you would earn a total of  150.00  from holding Pimco Rae Plus or generate 8.42% return on investment over 90 days.

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

Pimco Rae Plus  vs.  Fundamental Indexplus Tr

Pimco Rae Plus

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Pimco Rae Plus are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Pimco Rae may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Fundamental Indexplus

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Fundamental Indexplus Tr are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Fundamental Indexplus may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Pimco Rae and Fundamental Indexplus

The main advantage of trading using opposite Pimco Rae and Fundamental Indexplus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco Rae 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 Rae Plus 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.