Correlation Between BlackRock Credit and Pimco Income
Can any of the company-specific risk be diversified away by investing in both BlackRock Credit and Pimco Income 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 BlackRock Credit and Pimco Income into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BlackRock Credit Allocation and Pimco Income Strategy, you can compare the effects of market volatilities on BlackRock Credit and Pimco Income 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 BlackRock Credit with a short position of Pimco Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of BlackRock Credit and Pimco Income.
Diversification Opportunities for BlackRock Credit and Pimco Income
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between BlackRock and Pimco is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding BlackRock Credit Allocation and Pimco Income Strategy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco Income Strategy and BlackRock Credit 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 BlackRock Credit Allocation are associated (or correlated) with Pimco Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco Income Strategy has no effect on the direction of BlackRock Credit i.e., BlackRock Credit and Pimco Income go up and down completely randomly.
Pair Corralation between BlackRock Credit and Pimco Income
Considering the 90-day investment horizon BlackRock Credit is expected to generate 1.02 times less return on investment than Pimco Income. But when comparing it to its historical volatility, BlackRock Credit Allocation is 1.03 times less risky than Pimco Income. It trades about 0.07 of its potential returns per unit of risk. Pimco Income Strategy is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 671.00 in Pimco Income Strategy on August 28, 2024 and sell it today you would earn a total of 170.00 from holding Pimco Income Strategy or generate 25.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
BlackRock Credit Allocation vs. Pimco Income Strategy
Performance |
| Timeline |
| BlackRock Credit All |
| Pimco Income Strategy |
BlackRock Credit and Pimco Income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BlackRock Credit and Pimco Income
The main advantage of trading using opposite BlackRock Credit and Pimco Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BlackRock Credit position performs unexpectedly, Pimco Income 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 Income will offset losses from the drop in Pimco Income's long position.| BlackRock Credit vs. Pimco Corporate Income | BlackRock Credit vs. Pimco Income Strategy | BlackRock Credit vs. Pcm Fund | BlackRock Credit vs. Pimco High Income |
| Pimco Income vs. Western Asset High | Pimco Income vs. Pioneer Municipal High | Pimco Income vs. The Gabelli Equity | Pimco Income vs. Eaton Vance National |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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