Correlation Between Pimco Income and Dodge Cox
Can any of the company-specific risk be diversified away by investing in both Pimco Income and Dodge Cox 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 Income and Dodge Cox into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pimco Income Strategy and Dodge Cox Emerging, you can compare the effects of market volatilities on Pimco Income and Dodge Cox 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 Income with a short position of Dodge Cox. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco Income and Dodge Cox.
Diversification Opportunities for Pimco Income and Dodge Cox
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Pimco and Dodge is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Income Strategy and Dodge Cox Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dodge Cox Emerging and Pimco Income 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 Income Strategy are associated (or correlated) with Dodge Cox. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dodge Cox Emerging has no effect on the direction of Pimco Income i.e., Pimco Income and Dodge Cox go up and down completely randomly.
Pair Corralation between Pimco Income and Dodge Cox
Considering the 90-day investment horizon Pimco Income Strategy is expected to generate 0.51 times more return on investment than Dodge Cox. However, Pimco Income Strategy is 1.97 times less risky than Dodge Cox. It trades about 0.12 of its potential returns per unit of risk. Dodge Cox Emerging is currently generating about -0.22 per unit of risk. If you would invest 743.00 in Pimco Income Strategy on August 30, 2024 and sell it today you would earn a total of 7.00 from holding Pimco Income Strategy or generate 0.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pimco Income Strategy vs. Dodge Cox Emerging
Performance |
| Timeline |
| Pimco Income Strategy |
| Dodge Cox Emerging |
Pimco Income and Dodge Cox Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pimco Income and Dodge Cox
The main advantage of trading using opposite Pimco Income and Dodge Cox positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco Income position performs unexpectedly, Dodge Cox 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 Dodge Cox will offset losses from the drop in Dodge Cox's long position.| Pimco Income vs. Gabelli Global Small | Pimco Income vs. MFS Investment Grade | Pimco Income vs. Eaton Vance National | Pimco Income vs. GAMCO Natural Resources |
| Dodge Cox vs. Vanguard Emerging Markets | Dodge Cox vs. Vanguard Emerging Markets | Dodge Cox vs. HUMANA INC | Dodge Cox vs. Aquagold International |
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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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