Correlation Between Microsectors Gold and PIMCO RAFI
Can any of the company-specific risk be diversified away by investing in both Microsectors Gold and PIMCO RAFI 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 Microsectors Gold and PIMCO RAFI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsectors Gold 3x and PIMCO RAFI Dynamic, you can compare the effects of market volatilities on Microsectors Gold and PIMCO RAFI 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 Microsectors Gold with a short position of PIMCO RAFI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsectors Gold and PIMCO RAFI.
Diversification Opportunities for Microsectors Gold and PIMCO RAFI
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Microsectors and PIMCO is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Microsectors Gold 3x and PIMCO RAFI Dynamic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PIMCO RAFI Dynamic and Microsectors Gold 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 Microsectors Gold 3x are associated (or correlated) with PIMCO RAFI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PIMCO RAFI Dynamic has no effect on the direction of Microsectors Gold i.e., Microsectors Gold and PIMCO RAFI go up and down completely randomly.
Pair Corralation between Microsectors Gold and PIMCO RAFI
Given the investment horizon of 90 days Microsectors Gold 3x is expected to generate 7.06 times more return on investment than PIMCO RAFI. However, Microsectors Gold is 7.06 times more volatile than PIMCO RAFI Dynamic. It trades about 0.08 of its potential returns per unit of risk. PIMCO RAFI Dynamic is currently generating about 0.12 per unit of risk. If you would invest 11,198 in Microsectors Gold 3x on October 6, 2025 and sell it today you would earn a total of 2,066 from holding Microsectors Gold 3x or generate 18.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Microsectors Gold 3x vs. PIMCO RAFI Dynamic
Performance |
| Timeline |
| Microsectors Gold |
| PIMCO RAFI Dynamic |
Microsectors Gold and PIMCO RAFI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsectors Gold and PIMCO RAFI
The main advantage of trading using opposite Microsectors Gold and PIMCO RAFI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsectors Gold position performs unexpectedly, PIMCO RAFI 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 PIMCO RAFI will offset losses from the drop in PIMCO RAFI's long position.| Microsectors Gold vs. MicroSectors Gold 3X | Microsectors Gold vs. Franklin Responsibly Sourced | Microsectors Gold vs. GraniteShares Gold Trust | Microsectors Gold vs. DB Gold Double |
| PIMCO RAFI vs. JPMorgan Diversified Return | PIMCO RAFI vs. JPMorgan Diversified Return | PIMCO RAFI vs. Invesco Exchange Traded | PIMCO RAFI vs. CoreCommodity Natural Resources |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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