Correlation Between Pimco Dynamic and Barings Emerging
Can any of the company-specific risk be diversified away by investing in both Pimco Dynamic and Barings Emerging 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 Dynamic and Barings Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pimco Dynamic Income and Barings Emerging Markets, you can compare the effects of market volatilities on Pimco Dynamic and Barings Emerging 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 Dynamic with a short position of Barings Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco Dynamic and Barings Emerging.
Diversification Opportunities for Pimco Dynamic and Barings Emerging
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Pimco and Barings is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Dynamic Income and Barings Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barings Emerging Markets and Pimco Dynamic 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 Dynamic Income are associated (or correlated) with Barings Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barings Emerging Markets has no effect on the direction of Pimco Dynamic i.e., Pimco Dynamic and Barings Emerging go up and down completely randomly.
Pair Corralation between Pimco Dynamic and Barings Emerging
Considering the 90-day investment horizon Pimco Dynamic Income is expected to generate 1.71 times more return on investment than Barings Emerging. However, Pimco Dynamic is 1.71 times more volatile than Barings Emerging Markets. It trades about 0.1 of its potential returns per unit of risk. Barings Emerging Markets is currently generating about 0.05 per unit of risk. If you would invest 1,725 in Pimco Dynamic Income on August 27, 2024 and sell it today you would earn a total of 202.00 from holding Pimco Dynamic Income or generate 11.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pimco Dynamic Income vs. Barings Emerging Markets
Performance |
| Timeline |
| Pimco Dynamic Income |
| Barings Emerging Markets |
Pimco Dynamic and Barings Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pimco Dynamic and Barings Emerging
The main advantage of trading using opposite Pimco Dynamic and Barings Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco Dynamic position performs unexpectedly, Barings Emerging 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 Barings Emerging will offset losses from the drop in Barings Emerging's long position.| Pimco Dynamic vs. Pimco Corporate Income | Pimco Dynamic vs. Guggenheim Strategic Opportunities | Pimco Dynamic vs. Pimco Dynamic Income | Pimco Dynamic vs. Pimco High Income |
| Barings Emerging vs. Barings Active Short | Barings Emerging vs. Barings Emerging Markets | Barings Emerging vs. Barings Active Short | Barings Emerging vs. Barings Global Floating |
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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