Correlation Between Long Term and Pimco Senior
Can any of the company-specific risk be diversified away by investing in both Long Term and Pimco Senior 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 Long Term and Pimco Senior into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Long Term Government Fund and Pimco Senior Floating, you can compare the effects of market volatilities on Long Term and Pimco Senior 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 Long Term with a short position of Pimco Senior. Check out your portfolio center. Please also check ongoing floating volatility patterns of Long Term and Pimco Senior.
Diversification Opportunities for Long Term and Pimco Senior
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Long and Pimco is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Long Term Government Fund and Pimco Senior Floating in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco Senior Floating and Long Term 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 Long Term Government Fund are associated (or correlated) with Pimco Senior. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco Senior Floating has no effect on the direction of Long Term i.e., Long Term and Pimco Senior go up and down completely randomly.
Pair Corralation between Long Term and Pimco Senior
Assuming the 90 days horizon Long Term Government Fund is expected to generate 13.78 times more return on investment than Pimco Senior. However, Long Term is 13.78 times more volatile than Pimco Senior Floating. It trades about 0.12 of its potential returns per unit of risk. Pimco Senior Floating is currently generating about 0.3 per unit of risk. If you would invest 1,405 in Long Term Government Fund on September 13, 2024 and sell it today you would earn a total of 26.00 from holding Long Term Government Fund or generate 1.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Long Term Government Fund vs. Pimco Senior Floating
Performance |
| Timeline |
| Long Term Government |
| Pimco Senior Floating |
Long Term and Pimco Senior Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Long Term and Pimco Senior
The main advantage of trading using opposite Long Term and Pimco Senior positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Long Term position performs unexpectedly, Pimco Senior 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 Senior will offset losses from the drop in Pimco Senior's long position.| Long Term vs. Pimco Rae Worldwide | Long Term vs. Pimco Foreign Bond | Long Term vs. Pimco Preferred And | Long Term vs. Pimco Fundamental Advantage |
| Pimco Senior vs. Us Strategic Equity | Pimco Senior vs. Cutler Equity | Pimco Senior vs. Calamos Global Equity | Pimco Senior vs. Sarofim Equity |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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