Correlation Between Pimco Corporate and Guggenheim Strategic
Can any of the company-specific risk be diversified away by investing in both Pimco Corporate and Guggenheim Strategic 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 Corporate and Guggenheim Strategic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pimco Corporate Income and Guggenheim Strategic Opportunities, you can compare the effects of market volatilities on Pimco Corporate and Guggenheim Strategic 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 Corporate with a short position of Guggenheim Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco Corporate and Guggenheim Strategic.
Diversification Opportunities for Pimco Corporate and Guggenheim Strategic
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Pimco and Guggenheim is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Corporate Income and Guggenheim Strategic Opportuni in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guggenheim Strategic and Pimco Corporate 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 Corporate Income are associated (or correlated) with Guggenheim Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guggenheim Strategic has no effect on the direction of Pimco Corporate i.e., Pimco Corporate and Guggenheim Strategic go up and down completely randomly.
Pair Corralation between Pimco Corporate and Guggenheim Strategic
Considering the 90-day investment horizon Pimco Corporate Income is expected to generate 0.69 times more return on investment than Guggenheim Strategic. However, Pimco Corporate Income is 1.46 times less risky than Guggenheim Strategic. It trades about 0.41 of its potential returns per unit of risk. Guggenheim Strategic Opportunities is currently generating about 0.15 per unit of risk. If you would invest 1,367 in Pimco Corporate Income on August 27, 2024 and sell it today you would earn a total of 36.00 from holding Pimco Corporate Income or generate 2.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pimco Corporate Income vs. Guggenheim Strategic Opportuni
Performance |
| Timeline |
| Pimco Corporate Income |
| Guggenheim Strategic |
Pimco Corporate and Guggenheim Strategic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pimco Corporate and Guggenheim Strategic
The main advantage of trading using opposite Pimco Corporate and Guggenheim Strategic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco Corporate position performs unexpectedly, Guggenheim Strategic 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 Guggenheim Strategic will offset losses from the drop in Guggenheim Strategic's long position.| Pimco Corporate vs. Pimco Dynamic Income | Pimco Corporate vs. Guggenheim Strategic Opportunities | Pimco Corporate vs. Pimco Dynamic Income | Pimco Corporate vs. Pimco High 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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