Correlation Between Pimco Preferred and Pimco Total
Can any of the company-specific risk be diversified away by investing in both Pimco Preferred and Pimco Total 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 Total 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 Total Return, you can compare the effects of market volatilities on Pimco Preferred and Pimco Total 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 Total. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco Preferred and Pimco Total.
Diversification Opportunities for Pimco Preferred and Pimco Total
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Pimco and Pimco is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Preferred And and Pimco Total Return in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco 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 Pimco Total. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco Total Return has no effect on the direction of Pimco Preferred i.e., Pimco Preferred and Pimco Total go up and down completely randomly.
Pair Corralation between Pimco Preferred and Pimco Total
Assuming the 90 days horizon Pimco Preferred And is expected to generate 0.48 times more return on investment than Pimco Total. However, Pimco Preferred And is 2.06 times less risky than Pimco Total. It trades about 0.21 of its potential returns per unit of risk. Pimco Total Return is currently generating about 0.06 per unit of risk. If you would invest 877.00 in Pimco Preferred And on November 4, 2024 and sell it today you would earn a total of 48.00 from holding Pimco Preferred And or generate 5.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pimco Preferred And vs. Pimco Total Return
Performance |
| Timeline |
| Pimco Preferred And |
| Pimco Total Return |
Pimco Preferred and Pimco Total Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pimco Preferred and Pimco Total
The main advantage of trading using opposite Pimco Preferred and Pimco Total positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco Preferred position performs unexpectedly, Pimco Total 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 Total will offset losses from the drop in Pimco Total's long position.| Pimco Preferred vs. Gabelli Convertible And | Pimco Preferred vs. Advent Claymore Convertible | Pimco Preferred vs. Fidelity Sai Convertible | Pimco Preferred vs. Lord Abbett Convertible |
| Pimco Total vs. Ab High Income | Pimco Total vs. Artisan High Income | Pimco Total vs. The Hartford High | Pimco Total vs. Ironclad Managed Risk |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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