Correlation Between Pimco Dynamic and Highland Floating
Can any of the company-specific risk be diversified away by investing in both Pimco Dynamic and Highland Floating 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 Highland Floating 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 Highland Floating Rate, you can compare the effects of market volatilities on Pimco Dynamic and Highland Floating 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 Highland Floating. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco Dynamic and Highland Floating.
Diversification Opportunities for Pimco Dynamic and Highland Floating
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Pimco and Highland is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Dynamic Income and Highland Floating Rate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Highland Floating Rate 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 Highland Floating. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Highland Floating Rate has no effect on the direction of Pimco Dynamic i.e., Pimco Dynamic and Highland Floating go up and down completely randomly.
Pair Corralation between Pimco Dynamic and Highland Floating
Considering the 90-day investment horizon Pimco Dynamic is expected to generate 9.91 times less return on investment than Highland Floating. But when comparing it to its historical volatility, Pimco Dynamic Income is 2.95 times less risky than Highland Floating. It trades about 0.02 of its potential returns per unit of risk. Highland Floating Rate is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 564.00 in Highland Floating Rate on August 27, 2024 and sell it today you would earn a total of 13.00 from holding Highland Floating Rate or generate 2.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pimco Dynamic Income vs. Highland Floating Rate
Performance |
| Timeline |
| Pimco Dynamic Income |
| Highland Floating Rate |
Pimco Dynamic and Highland Floating Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pimco Dynamic and Highland Floating
The main advantage of trading using opposite Pimco Dynamic and Highland Floating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco Dynamic position performs unexpectedly, Highland Floating 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 Highland Floating will offset losses from the drop in Highland Floating's long position.| Pimco Dynamic vs. Pimco Income Strategy | Pimco Dynamic vs. MainStay CBRE Global | Pimco Dynamic vs. XAI Octagon Floating | Pimco Dynamic vs. Pimco Corporate Income |
| Highland Floating vs. Neuberger Berman Next | Highland Floating vs. SRH Total Return | Highland Floating vs. Nuveen Municipal Credit | Highland Floating vs. Doubleline Income Solutions |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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