Correlation Between Pimco Preferred and Total Return
Can any of the company-specific risk be diversified away by investing in both Pimco Preferred and Total Return 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 Total Return 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 Total Return Fund, you can compare the effects of market volatilities on Pimco Preferred and Total Return 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 Total Return. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco Preferred and Total Return.
Diversification Opportunities for Pimco Preferred and Total Return
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Pimco and Total is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Preferred And and Total Return Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Total Return 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 Total Return. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Total Return has no effect on the direction of Pimco Preferred i.e., Pimco Preferred and Total Return go up and down completely randomly.
Pair Corralation between Pimco Preferred and Total Return
Assuming the 90 days horizon Pimco Preferred And is expected to under-perform the Total Return. But the mutual fund apears to be less risky and, when comparing its historical volatility, Pimco Preferred And is 1.79 times less risky than Total Return. The mutual fund trades about -0.12 of its potential returns per unit of risk. The Total Return Fund is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 815.00 in Total Return Fund on October 19, 2024 and sell it today you would earn a total of 0.00 from holding Total Return Fund or generate 0.0% 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. Total Return Fund
Performance |
| Timeline |
| Pimco Preferred And |
| Total Return |
Pimco Preferred and Total Return Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pimco Preferred and Total Return
The main advantage of trading using opposite Pimco Preferred and Total Return positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco Preferred position performs unexpectedly, Total Return 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 Total Return will offset losses from the drop in Total Return's long position.| Pimco Preferred vs. Massmutual Premier Inflation Protected | Pimco Preferred vs. Ab Bond Inflation | Pimco Preferred vs. Asg Managed Futures | Pimco Preferred vs. Short Duration Inflation |
| Total Return vs. Total Return Fund | Total Return vs. High Yield Fund | Total Return vs. Mid Cap Growth | Total Return vs. Pimco Foreign Bond |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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