Correlation Between Pimco Preferred and Pimco Capital
Can any of the company-specific risk be diversified away by investing in both Pimco Preferred and Pimco Capital 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 Preferred and Pimco Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pimco Preferred And and Pimco Capital Sec, you can compare the effects of market volatilities on Pimco Preferred and Pimco Capital 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 Preferred with a short position of Pimco Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco Preferred and Pimco Capital.
Diversification Opportunities for Pimco Preferred and Pimco Capital
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Pimco and Pimco is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Preferred And and Pimco Capital Sec in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco Capital Sec and Pimco Preferred 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 Preferred And are associated (or correlated) with Pimco Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco Capital Sec has no effect on the direction of Pimco Preferred i.e., Pimco Preferred and Pimco Capital go up and down completely randomly.
Pair Corralation between Pimco Preferred and Pimco Capital
Assuming the 90 days horizon Pimco Preferred is expected to generate 1.19 times less return on investment than Pimco Capital. But when comparing it to its historical volatility, Pimco Preferred And is 1.04 times less risky than Pimco Capital. It trades about 0.16 of its potential returns per unit of risk. Pimco Capital Sec is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 936.00 in Pimco Capital Sec on September 1, 2024 and sell it today you would earn a total of 6.00 from holding Pimco Capital Sec or generate 0.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pimco Preferred And vs. Pimco Capital Sec
Performance |
| Timeline |
| Pimco Preferred And |
| Pimco Capital Sec |
Pimco Preferred and Pimco Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pimco Preferred and Pimco Capital
The main advantage of trading using opposite Pimco Preferred and Pimco Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco Preferred position performs unexpectedly, Pimco Capital 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 Capital will offset losses from the drop in Pimco Capital's long position.| Pimco Preferred vs. Nuveen Preferred Securities | Pimco Preferred vs. Cohen Steers Preferd | Pimco Preferred vs. Pimco Income Fund | Pimco Preferred vs. Pimco Floating Income |
| Pimco Capital vs. Legg Mason Partners | Pimco Capital vs. Multi Manager High Yield | Pimco Capital vs. Pace High Yield | Pimco Capital vs. Siit High Yield |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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