Correlation Between PIMCO Monthly and AGF American

Can any of the company-specific risk be diversified away by investing in both PIMCO Monthly and AGF American 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 Monthly and AGF American into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between PIMCO Monthly Income and AGF American Growth, you can compare the effects of market volatilities on PIMCO Monthly and AGF American 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 Monthly with a short position of AGF American. Check out your portfolio center. Please also check ongoing floating volatility patterns of PIMCO Monthly and AGF American.

Diversification Opportunities for PIMCO Monthly and AGF American

-0.59

Correlation Coefficient

PIMCO Monthly  AGF American

Excellent diversification

The 3 months correlation between PIMCO and AGF is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding PIMCO Monthly Income and AGF American Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AGF American Growth and PIMCO Monthly 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 Monthly Income are associated (or correlated) with AGF American. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AGF American Growth has no effect on the direction of PIMCO Monthly i.e., PIMCO Monthly and AGF American go up and down completely randomly.

Pair Corralation between PIMCO Monthly and AGF American

Assuming the 90 days trading horizon PIMCO Monthly Income is expected to under-perform the AGF American. But the fund apears to be less risky and, when comparing its historical volatility, PIMCO Monthly Income is 3.9 times less risky than AGF American. The fund trades about -0.25 of its potential returns per unit of risk. The AGF American Growth is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  6,383  in AGF American Growth on September 29, 2024 and sell it today you would earn a total of  842.00  from holding AGF American Growth or generate 13.19% return on investment over 90 days.

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

PIMCO Monthly Income  vs.  AGF American Growth

PIMCO Monthly Income

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PIMCO Monthly Income has generated negative risk-adjusted returns adding no value to fund investors. In spite of comparatively stable basic indicators, PIMCO Monthly is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

AGF American Growth

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in AGF American Growth are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat weak basic indicators, AGF American sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with PIMCO Monthly and AGF American

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

The idea behind PIMCO Monthly Income and AGF American Growth 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.