Correlation Between Pimco Funds and Cref Money

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

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

Diversification Opportunities for Pimco Funds and Cref Money

0.82

Correlation Coefficient

Pimco Funds  Cref Money

Very poor diversification

The 3 months correlation between Pimco and Cref is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Funds and Cref Money Market in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cref Money Market and Pimco Funds 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 Funds are associated (or correlated) with Cref Money. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cref Money Market has no effect on the direction of Pimco Funds i.e., Pimco Funds and Cref Money go up and down completely randomly.

Pair Corralation between Pimco Funds and Cref Money

If you would invest  2,962  in Cref Money Market on September 4, 2024 and sell it today you would earn a total of  11.00  from holding Cref Money Market or generate 0.37% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	95.24%
Values	Daily Returns

Pimco Funds   vs.  Cref Money Market

Pimco Funds

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Pimco Funds are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Pimco Funds is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Cref Money Market

Risk-Adjusted Performance

78 of 100

Market Crasher

Compared to the overall equity markets, risk-adjusted returns on investments in Cref Money Market are ranked lower than 78 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong primary indicators, Cref Money 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 Funds and Cref Money

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

The idea behind Pimco Funds and Cref Money Market 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.

Check out your portfolio center.

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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.