Correlation Between Guggenheim Macro and Pimco Income
Can any of the company-specific risk be diversified away by investing in both Guggenheim Macro 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 Guggenheim Macro and Pimco Income into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Guggenheim Macro Opportunities and Pimco Income Strategy, you can compare the effects of market volatilities on Guggenheim Macro 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 Guggenheim Macro with a short position of Pimco Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guggenheim Macro and Pimco Income.
Diversification Opportunities for Guggenheim Macro and Pimco Income
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GUGGENHEIM and Pimco is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Guggenheim Macro Opportunities 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 Guggenheim Macro 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 Guggenheim Macro Opportunities 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 Guggenheim Macro i.e., Guggenheim Macro and Pimco Income go up and down completely randomly.
Pair Corralation between Guggenheim Macro and Pimco Income
Assuming the 90 days horizon Guggenheim Macro is expected to generate 1.3 times less return on investment than Pimco Income. But when comparing it to its historical volatility, Guggenheim Macro Opportunities is 3.14 times less risky than Pimco Income. It trades about 0.28 of its potential returns per unit of risk. Pimco Income Strategy is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 743.00 in Pimco Income Strategy on August 30, 2024 and sell it today you would earn a total of 7.00 from holding Pimco Income Strategy or generate 0.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guggenheim Macro Opportunities vs. Pimco Income Strategy
Performance |
| Timeline |
| Guggenheim Macro Opp |
| Pimco Income Strategy |
Guggenheim Macro and Pimco Income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guggenheim Macro and Pimco Income
The main advantage of trading using opposite Guggenheim Macro and Pimco Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guggenheim Macro 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.| Guggenheim Macro vs. Guggenheim Total Return | Guggenheim Macro vs. Guggenheim Floating Rate | Guggenheim Macro vs. Jpmorgan Strategic Income | Guggenheim Macro vs. Guggenheim Macro Opportunities |
| Pimco Income vs. Pimco Corporate Income | Pimco Income vs. Pimco Global Stocksplus | Pimco Income vs. Pimco High Income | Pimco Income vs. Pimco Dynamic 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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