Correlation Between PIMCO Access and Western Asset
Can any of the company-specific risk be diversified away by investing in both PIMCO Access and Western Asset 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 PIMCO Access and Western Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PIMCO Access Income and Western Asset Emerging, you can compare the effects of market volatilities on PIMCO Access and Western Asset 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 PIMCO Access with a short position of Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of PIMCO Access and Western Asset.
Diversification Opportunities for PIMCO Access and Western Asset
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between PIMCO and Western is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding PIMCO Access Income and Western Asset Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset Emerging and PIMCO Access 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 PIMCO Access Income are associated (or correlated) with Western Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Asset Emerging has no effect on the direction of PIMCO Access i.e., PIMCO Access and Western Asset go up and down completely randomly.
Pair Corralation between PIMCO Access and Western Asset
Given the investment horizon of 90 days PIMCO Access Income is expected to generate 1.12 times more return on investment than Western Asset. However, PIMCO Access is 1.12 times more volatile than Western Asset Emerging. It trades about 0.09 of its potential returns per unit of risk. Western Asset Emerging is currently generating about 0.1 per unit of risk. If you would invest 1,255 in PIMCO Access Income on August 28, 2024 and sell it today you would earn a total of 418.00 from holding PIMCO Access Income or generate 33.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PIMCO Access Income vs. Western Asset Emerging
Performance |
| Timeline |
| PIMCO Access Income |
| Western Asset Emerging |
PIMCO Access and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PIMCO Access and Western Asset
The main advantage of trading using opposite PIMCO Access and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PIMCO Access position performs unexpectedly, Western Asset 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 Western Asset will offset losses from the drop in Western Asset's long position.| PIMCO Access vs. Pimco Dynamic Income | PIMCO Access vs. Pimco Corporate Income | PIMCO Access vs. Doubleline Yield Opportunities | PIMCO Access vs. Cohen Steers Reit |
| Western Asset vs. Doubleline Yield Opportunities | Western Asset vs. Highland Floating Rate | Western Asset vs. Doubleline Opportunistic Credit | Western Asset vs. Alliancebernstein Global High |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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