Correlation Between Pimco Dynamic and Western Asset
Can any of the company-specific risk be diversified away by investing in both Pimco Dynamic 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 Dynamic 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 Dynamic Income and Western Asset High, you can compare the effects of market volatilities on Pimco Dynamic 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 Dynamic with a short position of Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco Dynamic and Western Asset.
Diversification Opportunities for Pimco Dynamic and Western Asset
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Pimco and Western is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Dynamic Income and Western Asset High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset High 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 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 High has no effect on the direction of Pimco Dynamic i.e., Pimco Dynamic and Western Asset go up and down completely randomly.
Pair Corralation between Pimco Dynamic and Western Asset
Considering the 90-day investment horizon Pimco Dynamic Income is expected to generate 1.16 times more return on investment than Western Asset. However, Pimco Dynamic is 1.16 times more volatile than Western Asset High. It trades about 0.06 of its potential returns per unit of risk. Western Asset High is currently generating about 0.06 per unit of risk. If you would invest 1,503 in Pimco Dynamic Income on August 31, 2024 and sell it today you would earn a total of 409.00 from holding Pimco Dynamic Income or generate 27.21% 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. Western Asset High
Performance |
| Timeline |
| Pimco Dynamic Income |
| Western Asset High |
Pimco Dynamic and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pimco Dynamic and Western Asset
The main advantage of trading using opposite Pimco Dynamic and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco Dynamic 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 Dynamic vs. Pimco Corporate Income | Pimco Dynamic vs. Guggenheim Strategic Opportunities | Pimco Dynamic vs. Pimco Dynamic Income | Pimco Dynamic vs. Pimco High Income |
| Western Asset vs. MFS Investment Grade | Western Asset vs. Eaton Vance Municipal | Western Asset vs. DTF Tax Free | Western Asset vs. HUMANA INC |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
Other Complementary Tools
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges |