Correlation Between Guggenheim Strategic and Pimco Income
Can any of the company-specific risk be diversified away by investing in both Guggenheim Strategic 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 Strategic 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 Strategic Opportunities and Pimco Income Strategy, you can compare the effects of market volatilities on Guggenheim Strategic 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 Strategic with a short position of Pimco Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guggenheim Strategic and Pimco Income.
Diversification Opportunities for Guggenheim Strategic and Pimco Income
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Guggenheim and Pimco is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Guggenheim Strategic Opportuni 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 Strategic 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 Strategic 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 Strategic i.e., Guggenheim Strategic and Pimco Income go up and down completely randomly.
Pair Corralation between Guggenheim Strategic and Pimco Income
Considering the 90-day investment horizon Guggenheim Strategic Opportunities is expected to generate 1.07 times more return on investment than Pimco Income. However, Guggenheim Strategic is 1.07 times more volatile than Pimco Income Strategy. It trades about 0.17 of its potential returns per unit of risk. Pimco Income Strategy is currently generating about 0.1 per unit of risk. If you would invest 1,551 in Guggenheim Strategic Opportunities on August 31, 2024 and sell it today you would earn a total of 23.00 from holding Guggenheim Strategic Opportunities or generate 1.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guggenheim Strategic Opportuni vs. Pimco Income Strategy
Performance |
| Timeline |
| Guggenheim Strategic |
| Pimco Income Strategy |
Guggenheim Strategic and Pimco Income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guggenheim Strategic and Pimco Income
The main advantage of trading using opposite Guggenheim Strategic and Pimco Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guggenheim Strategic 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.The idea behind Guggenheim Strategic Opportunities and Pimco Income Strategy pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
| Pimco Income vs. Pcm Fund | Pimco Income vs. Pimco Corporate Income | Pimco Income vs. Pimco Global Stocksplus | Pimco Income vs. Pimco High 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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