Correlation Between Barings Corporate and Pimco Corporate
Can any of the company-specific risk be diversified away by investing in both Barings Corporate and Pimco Corporate 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 Barings Corporate and Pimco Corporate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barings Corporate Investors and Pimco Corporate Income, you can compare the effects of market volatilities on Barings Corporate and Pimco Corporate 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 Barings Corporate with a short position of Pimco Corporate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Corporate and Pimco Corporate.
Diversification Opportunities for Barings Corporate and Pimco Corporate
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Barings and Pimco is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Barings Corporate Investors and Pimco Corporate Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco Corporate Income and Barings Corporate 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 Barings Corporate Investors are associated (or correlated) with Pimco Corporate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco Corporate Income has no effect on the direction of Barings Corporate i.e., Barings Corporate and Pimco Corporate go up and down completely randomly.
Pair Corralation between Barings Corporate and Pimco Corporate
Considering the 90-day investment horizon Barings Corporate is expected to generate 1.45 times less return on investment than Pimco Corporate. In addition to that, Barings Corporate is 5.4 times more volatile than Pimco Corporate Income. It trades about 0.05 of its total potential returns per unit of risk. Pimco Corporate Income is currently generating about 0.39 per unit of volatility. If you would invest 1,438 in Pimco Corporate Income on August 28, 2024 and sell it today you would earn a total of 27.00 from holding Pimco Corporate Income or generate 1.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barings Corporate Investors vs. Pimco Corporate Income
Performance |
| Timeline |
| Barings Corporate |
| Pimco Corporate Income |
Barings Corporate and Pimco Corporate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings Corporate and Pimco Corporate
The main advantage of trading using opposite Barings Corporate and Pimco Corporate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Corporate position performs unexpectedly, Pimco Corporate 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 Corporate will offset losses from the drop in Pimco Corporate's long position.| Barings Corporate vs. Eaton Vance National | Barings Corporate vs. John Hancock Investors | Barings Corporate vs. MFS Municipal Income | Barings Corporate vs. RiverNorth Flexible Municipalome |
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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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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