Pimco Corporate Debt
| PCN Fund | USD 14.01 0.04 0.29% |
Pimco Corporate Income holds a debt-to-equity ratio of 0.497. With a high degree of financial leverage come high-interest payments, which usually reduce Pimco Corporate's Earnings Per Share (EPS).
Given that Pimco Corporate's debt-to-equity ratio measures a Fund's obligations relative to the value of its net assets, it is usually used by traders to estimate the extent to which Pimco Corporate is acquiring new debt as a mechanism of leveraging its assets. A high debt-to-equity ratio is generally associated with increased risk, implying that it has been aggressive in financing its growth with debt. Another way to look at debt-to-equity ratios is to compare the overall debt load of Pimco Corporate to its assets or equity, showing how much of the company assets belong to shareholders vs. creditors. If shareholders own more assets, Pimco Corporate is said to be less leveraged. If creditors hold a majority of Pimco Corporate's assets, the Fund is said to be highly leveraged.
Pimco |
Pimco Corporate Income Debt to Cash Allocation
Pimco Corporate Income has 308.81 M in debt with debt to equity (D/E) ratio of 0.5, which is OK given its current industry classification. Pimco Corporate Income has a current ratio of 0.36, suggesting that it has not enough short term capital to pay financial commitments when the payables are due. Debt can assist Pimco Corporate until it has trouble settling it off, either with new capital or with free cash flow. So, Pimco Corporate's shareholders could walk away with nothing if the company can't fulfill its legal obligations to repay debt. However, a more frequent occurrence is when companies like Pimco Corporate Income sell additional shares at bargain prices, diluting existing shareholders. Debt, in this case, can be an excellent and much better tool for Pimco to invest in growth at high rates of return. When we think about Pimco Corporate's use of debt, we should always consider it together with cash and equity.Pimco Corporate Assets Financed by Debt
Typically, companies with high debt-to-asset ratios are said to be highly leveraged. The higher the ratio, the greater risk will be associated with the Pimco Corporate's operation. In addition, a high debt-to-assets ratio may indicate a low borrowing capacity of Pimco Corporate, which in turn will lower the firm's financial flexibility.Pimco Corporate Corporate Bonds Issued
Understaning Pimco Corporate Use of Financial Leverage
Leverage ratios show Pimco Corporate's total debt position, including all outstanding obligations. In simple terms, high financial leverage means that the cost of production, along with the day-to-day running of the business, is high. Conversely, lower financial leverage implies lower fixed cost investment in the business, which is generally considered a good sign by investors. The degree of Pimco Corporate's financial leverage can be measured in several ways, including ratios such as the debt-to-equity ratio (total debt / total equity), or the debt ratio (total debt / total assets).
PIMCO Corporate Income Strategy Fund is a closed-ended fixed income mutual fund launched and managed by Allianz Global Investors Fund Management LLC. The fund is co-managed by Pacific Investment Management Company LLC. It invests in the fixed income markets of the United States. The fund invests in securities of companies that operate across diversified sectors. It invests in fixed income securities such as treasury bonds, corporate notes, U.S. government agency securities, mortgage backed and asset-backed securities. The fund employs fundamental analysis with a top-down security selection process to create its portfolio. The fund was formerly known as PIMCO Corporate Income Fund. PIMCO Corporate Income Strategy Fund was formed on October 17, 2001 and is domiciled in the United States. Please read more on our technical analysis page.
Pair Trading with Pimco Corporate
One of the main advantages of trading using pair correlations is that every trade hedges away some risk. Because there are two separate transactions required, even if Pimco Corporate position performs unexpectedly, the other equity 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 Corporate will appreciate offsetting losses from the drop in the long position's value.Moving together with Pimco Fund
| 0.74 | TDF | Templeton Dragon Closed | PairCorr |
| 0.83 | PHK | Pimco High Income | PairCorr |
| 0.63 | PEO | Adams Natural Resources | PairCorr |
Moving against Pimco Fund
| 0.73 | VVR | Invesco Senior Income | PairCorr |
| 0.55 | MRK | Merck Company Fiscal Year End 6th of February 2025 | PairCorr |
| 0.53 | JNJ | Johnson Johnson Sell-off Trend | PairCorr |
The ability to find closely correlated positions to Pimco Corporate could be a great tool in your tax-loss harvesting strategies, allowing investors a quick way to find a similar-enough asset to replace Pimco Corporate when you sell it. If you don't do this, your portfolio allocation will be skewed against your target asset allocation. So, investors can't just sell and buy back Pimco Corporate - that would be a violation of the tax code under the "wash sale" rule, and this is why you need to find a similar enough asset and use the proceeds from selling Pimco Corporate Income to buy it.
The correlation of Pimco Corporate is a statistical measure of how it moves in relation to other instruments. This measure is expressed in what is known as the correlation coefficient, which ranges between -1 and +1. A perfect positive correlation (i.e., a correlation coefficient of +1) implies that as Pimco Corporate moves, either up or down, the other security will move in the same direction. Alternatively, perfect negative correlation means that if Pimco Corporate Income moves in either direction, the perfectly negatively correlated security will move in the opposite direction. If the correlation is 0, the equities are not correlated; they are entirely random. A correlation greater than 0.8 is generally described as strong, whereas a correlation less than 0.5 is generally considered weak.
Correlation analysis and pair trading evaluation for Pimco Corporate can also be used as hedging techniques within a particular sector or industry or even over random equities to generate a better risk-adjusted return on your portfolios.Other Information on Investing in Pimco Fund
Pimco Corporate financial ratios help investors to determine whether Pimco Fund is cheap or expensive when compared to a particular measure, such as profits or enterprise value. In other words, they help investors to determine the cost of investment in Pimco with respect to the benefits of owning Pimco Corporate security.
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What is Financial Leverage?
Financial leverage is the use of borrowed money (debt) to finance the purchase of assets with the expectation that the income or capital gain from the new asset will exceed the cost of borrowing. In most cases, the debt provider will limit how much risk it is ready to take and indicate a limit on the extent of the leverage it will allow. In the case of asset-backed lending, the financial provider uses the assets as collateral until the borrower repays the loan. In the case of a cash flow loan, the general creditworthiness of the company is used to back the loan. The concept of leverage is common in the business world. It is mostly used to boost the returns on equity capital of a company, especially when the business is unable to increase its operating efficiency and returns on total investment. Because earnings on borrowing are higher than the interest payable on debt, the company's total earnings will increase, ultimately boosting stockholders' profits.Leverage and Capital Costs
The debt to equity ratio plays a role in the working average cost of capital (WACC). The overall interest on debt represents the break-even point that must be obtained to profitability in a given venture. Thus, WACC is essentially the average interest an organization owes on the capital it has borrowed for leverage. Let's say equity represents 60% of borrowed capital, and debt is 40%. This results in a financial leverage calculation of 40/60, or 0.6667. The organization owes 10% on all equity and 5% on all debt. That means that the weighted average cost of capital is (.4)(5) + (.6)(10) - or 8%. For every $10,000 borrowed, this organization will owe $800 in interest. Profit must be higher than 8% on the project to offset the cost of interest and justify this leverage.Benefits of Financial Leverage
Leverage provides the following benefits for companies:- Leverage is an essential tool a company's management can use to make the best financing and investment decisions.
- It provides a variety of financing sources by which the firm can achieve its target earnings.
- Leverage is also an essential technique in investing as it helps companies set a threshold for the expansion of business operations. For example, it can be used to recommend restrictions on business expansion once the projected return on additional investment is lower than the cost of debt.