Correlation Between Pimco Capital and Pimco Preferred
Can any of the company-specific risk be diversified away by investing in both Pimco Capital and Pimco Preferred 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 Capital and Pimco Preferred into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pimco Capital Sec and Pimco Preferred And, you can compare the effects of market volatilities on Pimco Capital and Pimco Preferred 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 Capital with a short position of Pimco Preferred. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco Capital and Pimco Preferred.
Diversification Opportunities for Pimco Capital and Pimco Preferred
1.0 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Pimco and Pimco is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Capital Sec and Pimco Preferred And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco Preferred And and Pimco Capital 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 Capital Sec are associated (or correlated) with Pimco Preferred. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco Preferred And has no effect on the direction of Pimco Capital i.e., Pimco Capital and Pimco Preferred go up and down completely randomly.
Pair Corralation between Pimco Capital and Pimco Preferred
Assuming the 90 days horizon Pimco Capital is expected to generate 1.02 times less return on investment than Pimco Preferred. But when comparing it to its historical volatility, Pimco Capital Sec is 1.01 times less risky than Pimco Preferred. It trades about 0.23 of its potential returns per unit of risk. Pimco Preferred And is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 779.00 in Pimco Preferred And on August 31, 2024 and sell it today you would earn a total of 160.00 from holding Pimco Preferred And or generate 20.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.73% |
| Values | Daily Returns |
Pimco Capital Sec vs. Pimco Preferred And
Performance |
| Timeline |
| Pimco Capital Sec |
| Pimco Preferred And |
Pimco Capital and Pimco Preferred Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pimco Capital and Pimco Preferred
The main advantage of trading using opposite Pimco Capital and Pimco Preferred positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco Capital position performs unexpectedly, Pimco Preferred 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 Preferred will offset losses from the drop in Pimco Preferred's long position.| Pimco Capital vs. Nuveen Preferred Securities | Pimco Capital vs. Cohen Steers Preferd | Pimco Capital vs. Pimco Income Fund | Pimco Capital vs. Pimco Floating Income |
| Pimco Preferred vs. Nuveen Arizona Municipal | Pimco Preferred vs. Ab Impact Municipal | Pimco Preferred vs. Old Westbury Municipal | Pimco Preferred vs. Nuveen Minnesota Municipal |
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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