Correlation Between All Asset and Pimco Credit
Can any of the company-specific risk be diversified away by investing in both All Asset and Pimco Credit 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 All Asset and Pimco Credit into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between All Asset Fund and Pimco Credit Absolute, you can compare the effects of market volatilities on All Asset and Pimco Credit 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 All Asset with a short position of Pimco Credit. Check out your portfolio center. Please also check ongoing floating volatility patterns of All Asset and Pimco Credit.
Diversification Opportunities for All Asset and Pimco Credit
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between All and Pimco is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding All Asset Fund and Pimco Credit Absolute in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco Credit Absolute and All Asset 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 All Asset Fund are associated (or correlated) with Pimco Credit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco Credit Absolute has no effect on the direction of All Asset i.e., All Asset and Pimco Credit go up and down completely randomly.
Pair Corralation between All Asset and Pimco Credit
Assuming the 90 days horizon All Asset Fund is expected to generate 3.1 times more return on investment than Pimco Credit. However, All Asset is 3.1 times more volatile than Pimco Credit Absolute. It trades about 0.16 of its potential returns per unit of risk. Pimco Credit Absolute is currently generating about 0.21 per unit of risk. If you would invest 1,114 in All Asset Fund on August 31, 2024 and sell it today you would earn a total of 16.00 from holding All Asset Fund or generate 1.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
All Asset Fund vs. Pimco Credit Absolute
Performance |
| Timeline |
| All Asset Fund |
| Pimco Credit Absolute |
All Asset and Pimco Credit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with All Asset and Pimco Credit
The main advantage of trading using opposite All Asset and Pimco Credit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if All Asset position performs unexpectedly, Pimco Credit 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 Credit will offset losses from the drop in Pimco Credit's long position.| All Asset vs. All Asset Fund | All Asset vs. Pimco All Asset | All Asset vs. All Asset Fund | All Asset vs. Pimco All Asset |
| Pimco Credit vs. Goehring Rozencwajg Resources | Pimco Credit vs. Clearbridge Energy Mlp | Pimco Credit vs. Tortoise Energy Independence | Pimco Credit vs. Gmo Resources |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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