Correlation Between Fundamental Indexplus and California Intermediate
Can any of the company-specific risk be diversified away by investing in both Fundamental Indexplus and California Intermediate 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 Fundamental Indexplus and California Intermediate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fundamental Indexplus Tr and California Intermediate Municipal, you can compare the effects of market volatilities on Fundamental Indexplus and California Intermediate 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 Fundamental Indexplus with a short position of California Intermediate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fundamental Indexplus and California Intermediate.
Diversification Opportunities for Fundamental Indexplus and California Intermediate
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Fundamental and CALIFORNIA is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Fundamental Indexplus Tr and California Intermediate Munici in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on California Intermediate and Fundamental Indexplus 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 Fundamental Indexplus Tr are associated (or correlated) with California Intermediate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of California Intermediate has no effect on the direction of Fundamental Indexplus i.e., Fundamental Indexplus and California Intermediate go up and down completely randomly.
Pair Corralation between Fundamental Indexplus and California Intermediate
Assuming the 90 days horizon Fundamental Indexplus Tr is expected to generate 4.4 times more return on investment than California Intermediate. However, Fundamental Indexplus is 4.4 times more volatile than California Intermediate Municipal. It trades about 0.07 of its potential returns per unit of risk. California Intermediate Municipal is currently generating about 0.06 per unit of risk. If you would invest 1,460 in Fundamental Indexplus Tr on June 5, 2025 and sell it today you would earn a total of 628.00 from holding Fundamental Indexplus Tr or generate 43.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Fundamental Indexplus Tr vs. California Intermediate Munici
Performance |
| Timeline |
| Fundamental Indexplus |
| California Intermediate |
Fundamental Indexplus and California Intermediate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fundamental Indexplus and California Intermediate
The main advantage of trading using opposite Fundamental Indexplus and California Intermediate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fundamental Indexplus position performs unexpectedly, California Intermediate 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 California Intermediate will offset losses from the drop in California Intermediate's long position.| Fundamental Indexplus vs. Pimco Short Asset | Fundamental Indexplus vs. Pimco Small Cap | Fundamental Indexplus vs. Pimco International Stocksplus | Fundamental Indexplus vs. Real Return Asset |
| California Intermediate vs. Pimco Rae Worldwide | California Intermediate vs. Pimco Rae Worldwide | California Intermediate vs. Pimco Rae Worldwide | California Intermediate vs. Pimco Rae Worldwide |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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