Correlation Between PIMCO Access and Pimco Dynamic
Can any of the company-specific risk be diversified away by investing in both PIMCO Access and Pimco Dynamic 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 Pimco Dynamic 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 Pimco Dynamic Income, you can compare the effects of market volatilities on PIMCO Access and Pimco Dynamic 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 Pimco Dynamic. Check out your portfolio center. Please also check ongoing floating volatility patterns of PIMCO Access and Pimco Dynamic.
Diversification Opportunities for PIMCO Access and Pimco Dynamic
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between PIMCO and Pimco is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding PIMCO Access Income and Pimco Dynamic Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco Dynamic Income 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 Pimco Dynamic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco Dynamic Income has no effect on the direction of PIMCO Access i.e., PIMCO Access and Pimco Dynamic go up and down completely randomly.
Pair Corralation between PIMCO Access and Pimco Dynamic
Given the investment horizon of 90 days PIMCO Access Income is expected to generate 1.12 times more return on investment than Pimco Dynamic. However, PIMCO Access is 1.12 times more volatile than Pimco Dynamic Income. It trades about 0.11 of its potential returns per unit of risk. Pimco Dynamic Income is currently generating about -0.07 per unit of risk. If you would invest 1,613 in PIMCO Access Income on August 24, 2024 and sell it today you would earn a total of 34.00 from holding PIMCO Access Income or generate 2.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
PIMCO Access Income vs. Pimco Dynamic Income
Performance |
| Timeline |
| PIMCO Access Income |
| Pimco Dynamic Income |
PIMCO Access and Pimco Dynamic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PIMCO Access and Pimco Dynamic
The main advantage of trading using opposite PIMCO Access and Pimco Dynamic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PIMCO Access position performs unexpectedly, Pimco Dynamic 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 Dynamic will offset losses from the drop in Pimco Dynamic'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 |
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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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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