Correlation Between NYSE Composite and Pimco Income
Can any of the company-specific risk be diversified away by investing in both NYSE Composite 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 NYSE Composite and Pimco Income into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Pimco Income Fund, you can compare the effects of market volatilities on NYSE Composite 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 NYSE Composite with a short position of Pimco Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Pimco Income.
Diversification Opportunities for NYSE Composite and Pimco Income
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NYSE and Pimco is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Pimco Income Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco Income and NYSE Composite 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 NYSE Composite 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 has no effect on the direction of NYSE Composite i.e., NYSE Composite and Pimco Income go up and down completely randomly.
Pair Corralation between NYSE Composite and Pimco Income
Assuming the 90 days trading horizon NYSE Composite is expected to generate 2.26 times more return on investment than Pimco Income. However, NYSE Composite is 2.26 times more volatile than Pimco Income Fund. It trades about 0.11 of its potential returns per unit of risk. Pimco Income Fund is currently generating about 0.09 per unit of risk. If you would invest 1,535,281 in NYSE Composite on August 31, 2024 and sell it today you would earn a total of 485,701 from holding NYSE Composite or generate 31.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Pimco Income Fund
Performance |
| Timeline |
NYSE Composite and Pimco Income Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Pimco Income Fund
Pair trading matchups for Pimco Income
Pair Trading with NYSE Composite and Pimco Income
The main advantage of trading using opposite NYSE Composite and Pimco Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite 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.| NYSE Composite vs. Nextplat Corp | NYSE Composite vs. Qualys Inc | NYSE Composite vs. Cadence Design Systems | NYSE Composite vs. Asure Software |
| Pimco Income vs. Gmo High Yield | Pimco Income vs. Pioneer High Yield | Pimco Income vs. Blackrock High Yield | Pimco Income vs. Fidelity Capital 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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