Correlation Between Pimco Unconstrained and Pimco Extended
Can any of the company-specific risk be diversified away by investing in both Pimco Unconstrained and Pimco Extended 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 Unconstrained and Pimco Extended into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pimco Unconstrained Bond and Pimco Extended Duration, you can compare the effects of market volatilities on Pimco Unconstrained and Pimco Extended 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 Unconstrained with a short position of Pimco Extended. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco Unconstrained and Pimco Extended.
Diversification Opportunities for Pimco Unconstrained and Pimco Extended
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Pimco and Pimco is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Unconstrained Bond and Pimco Extended Duration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco Extended Duration and Pimco Unconstrained 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 Unconstrained Bond are associated (or correlated) with Pimco Extended. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco Extended Duration has no effect on the direction of Pimco Unconstrained i.e., Pimco Unconstrained and Pimco Extended go up and down completely randomly.
Pair Corralation between Pimco Unconstrained and Pimco Extended
Assuming the 90 days horizon Pimco Unconstrained is expected to generate 3.13 times less return on investment than Pimco Extended. But when comparing it to its historical volatility, Pimco Unconstrained Bond is 11.31 times less risky than Pimco Extended. It trades about 0.27 of its potential returns per unit of risk. Pimco Extended Duration is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,367 in Pimco Extended Duration on September 1, 2024 and sell it today you would earn a total of 35.00 from holding Pimco Extended Duration or generate 2.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pimco Unconstrained Bond vs. Pimco Extended Duration
Performance |
| Timeline |
| Pimco Unconstrained Bond |
| Pimco Extended Duration |
Pimco Unconstrained and Pimco Extended Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pimco Unconstrained and Pimco Extended
The main advantage of trading using opposite Pimco Unconstrained and Pimco Extended positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco Unconstrained position performs unexpectedly, Pimco Extended 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 Extended will offset losses from the drop in Pimco Extended's long position.| Pimco Unconstrained vs. Baird Smallmid Cap | Pimco Unconstrained vs. Artisan Small Cap | Pimco Unconstrained vs. Vanguard Small Cap Growth | Pimco Unconstrained vs. The Hartford Small |
| Pimco Extended vs. Lgm Risk Managed | Pimco Extended vs. Siit High Yield | Pimco Extended vs. Strategic Allocation Aggressive | Pimco Extended vs. Pioneer High Yield |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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