Correlation Between Technology Fund and Pinebridge Dynamic

Can any of the company-specific risk be diversified away by investing in both Technology Fund and Pinebridge Dynamic 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 Technology Fund and Pinebridge Dynamic into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Technology Fund Class and Pinebridge Dynamic Asset, you can compare the effects of market volatilities on Technology Fund and Pinebridge Dynamic 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 Technology Fund with a short position of Pinebridge Dynamic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Technology Fund and Pinebridge Dynamic.

Diversification Opportunities for Technology Fund and Pinebridge Dynamic

0.99

Correlation Coefficient

Technology Fund  Pinebridge Dynamic

No risk reduction

The 3 months correlation between Technology and Pinebridge is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Technology Fund Class and Pinebridge Dynamic Asset in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pinebridge Dynamic Asset and Technology Fund 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 Technology Fund Class are associated (or correlated) with Pinebridge Dynamic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pinebridge Dynamic Asset has no effect on the direction of Technology Fund i.e., Technology Fund and Pinebridge Dynamic go up and down completely randomly.

Pair Corralation between Technology Fund and Pinebridge Dynamic

Assuming the 90 days horizon Technology Fund Class is expected to generate 2.32 times more return on investment than Pinebridge Dynamic. However, Technology Fund is 2.32 times more volatile than Pinebridge Dynamic Asset. It trades about 0.34 of its potential returns per unit of risk. Pinebridge Dynamic Asset is currently generating about 0.27 per unit of risk. If you would invest  16,400  in Technology Fund Class on April 30, 2025 and sell it today you would earn a total of  4,109  from holding Technology Fund Class or generate 25.05% return on investment over 90 days.

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

Technology Fund Class  vs.  Pinebridge Dynamic Asset

Technology Fund Class

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Technology Fund Class are ranked lower than 26 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Technology Fund showed solid returns over the last few months and may actually be approaching a breakup point.

Pinebridge Dynamic Asset

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Pinebridge Dynamic Asset are ranked lower than 21 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Pinebridge Dynamic may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Technology Fund and Pinebridge Dynamic

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

The idea behind Technology Fund Class and Pinebridge Dynamic Asset 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 Transaction History module to view history of all your transactions and understand their impact on performance.