Correlation Between Pimco Preferred and High Yield
Can any of the company-specific risk be diversified away by investing in both Pimco Preferred and High Yield 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 High Yield 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 High Yield Fund, you can compare the effects of market volatilities on Pimco Preferred and High Yield 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 High Yield. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco Preferred and High Yield.
Diversification Opportunities for Pimco Preferred and High Yield
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Pimco and High is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Preferred And and High Yield Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on High Yield Fund 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 High Yield. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of High Yield Fund has no effect on the direction of Pimco Preferred i.e., Pimco Preferred and High Yield go up and down completely randomly.
Pair Corralation between Pimco Preferred and High Yield
Assuming the 90 days horizon Pimco Preferred And is expected to under-perform the High Yield. In addition to that, Pimco Preferred is 1.0 times more volatile than High Yield Fund. It trades about -0.03 of its total potential returns per unit of risk. High Yield Fund is currently generating about 0.1 per unit of volatility. If you would invest 804.00 in High Yield Fund on August 29, 2024 and sell it today you would earn a total of 3.00 from holding High Yield Fund or generate 0.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pimco Preferred And vs. High Yield Fund
Performance |
| Timeline |
| Pimco Preferred And |
| High Yield Fund |
Pimco Preferred and High Yield Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pimco Preferred and High Yield
The main advantage of trading using opposite Pimco Preferred and High Yield positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco Preferred position performs unexpectedly, High Yield 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 High Yield will offset losses from the drop in High Yield's long position.| Pimco Preferred vs. Pimco Mortgage Opportunities | Pimco Preferred vs. Pimco Floating Income | Pimco Preferred vs. Pimco High Yield | Pimco Preferred vs. Pimco Income Fund |
| High Yield vs. Ishares Municipal Bond | High Yield vs. Dws Government Money | High Yield vs. Multisector Bond Sma | High Yield vs. T Rowe Price |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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