Correlation Between Optimum Fixed and Pimco Income
Can any of the company-specific risk be diversified away by investing in both Optimum Fixed 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 Optimum Fixed and Pimco Income into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Optimum Fixed Income and Pimco Income Fund, you can compare the effects of market volatilities on Optimum Fixed 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 Optimum Fixed with a short position of Pimco Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Optimum Fixed and Pimco Income.
Diversification Opportunities for Optimum Fixed and Pimco Income
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Optimum and Pimco is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Optimum Fixed Income and Pimco Income Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco Income and Optimum Fixed 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 Optimum Fixed Income 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 Optimum Fixed i.e., Optimum Fixed and Pimco Income go up and down completely randomly.
Pair Corralation between Optimum Fixed and Pimco Income
Assuming the 90 days horizon Optimum Fixed Income is expected to generate 1.7 times more return on investment than Pimco Income. However, Optimum Fixed is 1.7 times more volatile than Pimco Income Fund. It trades about 0.12 of its potential returns per unit of risk. Pimco Income Fund is currently generating about 0.19 per unit of risk. If you would invest 836.00 in Optimum Fixed Income on September 1, 2024 and sell it today you would earn a total of 9.00 from holding Optimum Fixed Income or generate 1.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Optimum Fixed Income vs. Pimco Income Fund
Performance |
| Timeline |
| Optimum Fixed Income |
| Pimco Income |
Optimum Fixed and Pimco Income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Optimum Fixed and Pimco Income
The main advantage of trading using opposite Optimum Fixed and Pimco Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Optimum Fixed 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.| Optimum Fixed vs. Optimum Small Mid Cap | Optimum Fixed vs. Optimum Small Mid Cap | Optimum Fixed vs. Ivy Apollo Multi Asset | Optimum Fixed vs. Optimum Fixed Income |
| Pimco Income vs. Fidelity Real Estate | Pimco Income vs. Guggenheim Risk Managed | Pimco Income vs. Commonwealth Real Estate | Pimco Income vs. Msif Real Estate |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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