Correlation Between Pimco Preferred and Pimco Mortgage
Can any of the company-specific risk be diversified away by investing in both Pimco Preferred and Pimco Mortgage 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 Mortgage 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 Mortgage Opportunities, you can compare the effects of market volatilities on Pimco Preferred and Pimco Mortgage 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 Mortgage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco Preferred and Pimco Mortgage.
Diversification Opportunities for Pimco Preferred and Pimco Mortgage
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Pimco and Pimco is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Preferred And and Pimco Mortgage Opportunities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco Mortgage Oppor 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 Mortgage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco Mortgage Oppor has no effect on the direction of Pimco Preferred i.e., Pimco Preferred and Pimco Mortgage go up and down completely randomly.
Pair Corralation between Pimco Preferred and Pimco Mortgage
Assuming the 90 days horizon Pimco Preferred And is expected to under-perform the Pimco Mortgage. But the mutual fund apears to be less risky and, when comparing its historical volatility, Pimco Preferred And is 1.29 times less risky than Pimco Mortgage. The mutual fund trades about -0.03 of its potential returns per unit of risk. The Pimco Mortgage Opportunities is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 921.00 in Pimco Mortgage Opportunities on August 29, 2024 and sell it today you would earn a total of 7.00 from holding Pimco Mortgage Opportunities or generate 0.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Pimco Preferred And vs. Pimco Mortgage Opportunities
Performance |
| Timeline |
| Pimco Preferred And |
| Pimco Mortgage Oppor |
Pimco Preferred and Pimco Mortgage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pimco Preferred and Pimco Mortgage
The main advantage of trading using opposite Pimco Preferred and Pimco Mortgage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco Preferred position performs unexpectedly, Pimco Mortgage 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 Mortgage will offset losses from the drop in Pimco Mortgage's long position.| Pimco Preferred vs. Queens Road Small | Pimco Preferred vs. Amg River Road | Pimco Preferred vs. Great West Loomis Sayles | Pimco Preferred vs. Pace Smallmedium Value |
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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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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