Correlation Between Western Asset and Pimco Income
Can any of the company-specific risk be diversified away by investing in both Western Asset 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 Western Asset and Pimco Income into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Asset Global and Pimco Income Strategy, you can compare the effects of market volatilities on Western Asset 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 Western Asset with a short position of Pimco Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Pimco Income.
Diversification Opportunities for Western Asset and Pimco Income
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Western and Pimco is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Global 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 Western Asset 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 Western Asset Global 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 Western Asset i.e., Western Asset and Pimco Income go up and down completely randomly.
Pair Corralation between Western Asset and Pimco Income
Considering the 90-day investment horizon Western Asset Global is expected to generate 1.35 times more return on investment than Pimco Income. However, Western Asset is 1.35 times more volatile than Pimco Income Strategy. It trades about 0.13 of its potential returns per unit of risk. Pimco Income Strategy is currently generating about 0.05 per unit of risk. If you would invest 661.00 in Western Asset Global on September 1, 2024 and sell it today you would earn a total of 12.00 from holding Western Asset Global or generate 1.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Asset Global vs. Pimco Income Strategy
Performance |
| Timeline |
| Western Asset Global |
| Pimco Income Strategy |
Western Asset and Pimco Income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Pimco Income
The main advantage of trading using opposite Western Asset and Pimco Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset 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.| Western Asset vs. Doubleline Yield Opportunities | Western Asset vs. Highland Floating Rate | Western Asset vs. Doubleline Opportunistic Credit | Western Asset vs. Western Asset Emerging |
| Pimco Income vs. PIMCO Access Income | Pimco Income vs. Pimco High Income | Pimco Income vs. Pimco Corporate Income | Pimco Income vs. Pimco Corporate Income |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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