Correlation Between Vanguard Target and Pimco Total
Can any of the company-specific risk be diversified away by investing in both Vanguard Target and Pimco Total 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 Vanguard Target and Pimco Total into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Target Retirement and Pimco Total Return, you can compare the effects of market volatilities on Vanguard Target and Pimco Total 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 Vanguard Target with a short position of Pimco Total. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Target and Pimco Total.
Diversification Opportunities for Vanguard Target and Pimco Total
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Vanguard and Pimco is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Target Retirement and Pimco Total Return in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco Total Return and Vanguard Target 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 Vanguard Target Retirement are associated (or correlated) with Pimco Total. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco Total Return has no effect on the direction of Vanguard Target i.e., Vanguard Target and Pimco Total go up and down completely randomly.
Pair Corralation between Vanguard Target and Pimco Total
Assuming the 90 days horizon Vanguard Target Retirement is expected to generate 2.74 times more return on investment than Pimco Total. However, Vanguard Target is 2.74 times more volatile than Pimco Total Return. It trades about 0.1 of its potential returns per unit of risk. Pimco Total Return is currently generating about 0.08 per unit of risk. If you would invest 4,972 in Vanguard Target Retirement on September 13, 2025 and sell it today you would earn a total of 166.00 from holding Vanguard Target Retirement or generate 3.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Target Retirement vs. Pimco Total Return
Performance |
| Timeline |
| Vanguard Target Reti |
| Pimco Total Return |
Vanguard Target and Pimco Total Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Target and Pimco Total
The main advantage of trading using opposite Vanguard Target and Pimco Total positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Target position performs unexpectedly, Pimco Total 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 Total will offset losses from the drop in Pimco Total's long position.| Vanguard Target vs. Vanguard Target Retirement | Vanguard Target vs. Vanguard Target Retirement | Vanguard Target vs. Vanguard Target Retirement | Vanguard Target vs. Vanguard Target Retirement |
| Pimco Total vs. Tiaa Cref Lifestyle Moderate | Pimco Total vs. Trowe Price Retirement | Pimco Total vs. Cornerstone Moderately Aggressive | Pimco Total vs. Lifestyle Ii Moderate |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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