Correlation Between Multisector Bond and Pimco High
Can any of the company-specific risk be diversified away by investing in both Multisector Bond and Pimco High 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 Multisector Bond and Pimco High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Multisector Bond Sma and Pimco High Yield, you can compare the effects of market volatilities on Multisector Bond and Pimco High 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 Multisector Bond with a short position of Pimco High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Multisector Bond and Pimco High.
Diversification Opportunities for Multisector Bond and Pimco High
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Multisector and Pimco is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Multisector Bond Sma and Pimco High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco High Yield and Multisector Bond 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 Multisector Bond Sma are associated (or correlated) with Pimco High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco High Yield has no effect on the direction of Multisector Bond i.e., Multisector Bond and Pimco High go up and down completely randomly.
Pair Corralation between Multisector Bond and Pimco High
Assuming the 90 days horizon Multisector Bond Sma is expected to generate 1.88 times more return on investment than Pimco High. However, Multisector Bond is 1.88 times more volatile than Pimco High Yield. It trades about 0.13 of its potential returns per unit of risk. Pimco High Yield is currently generating about 0.19 per unit of risk. If you would invest 1,141 in Multisector Bond Sma on September 12, 2024 and sell it today you would earn a total of 235.00 from holding Multisector Bond Sma or generate 20.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Multisector Bond Sma vs. Pimco High Yield
Performance |
| Timeline |
| Multisector Bond Sma |
| Pimco High Yield |
Multisector Bond and Pimco High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Multisector Bond and Pimco High
The main advantage of trading using opposite Multisector Bond and Pimco High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Multisector Bond position performs unexpectedly, Pimco High 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 High will offset losses from the drop in Pimco High's long position.| Multisector Bond vs. SCOR PK | Multisector Bond vs. Morningstar Unconstrained Allocation | Multisector Bond vs. Thrivent High Yield | Multisector Bond vs. Via Renewables |
| Pimco High vs. Ishares Municipal Bond | Pimco High vs. Multisector Bond Sma | Pimco High vs. Versatile Bond Portfolio | Pimco High vs. Alliancebernstein Bond |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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