Correlation Between Pimco Income and Salient Select
Can any of the company-specific risk be diversified away by investing in both Pimco Income and Salient Select 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 Salient Select 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 Salient Select Income, you can compare the effects of market volatilities on Pimco Income and Salient Select 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 Salient Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco Income and Salient Select.
Diversification Opportunities for Pimco Income and Salient Select
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Pimco and Salient is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Income Strategy and Salient Select Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Salient Select Income 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 Salient Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Salient Select Income has no effect on the direction of Pimco Income i.e., Pimco Income and Salient Select go up and down completely randomly.
Pair Corralation between Pimco Income and Salient Select
Considering the 90-day investment horizon Pimco Income is expected to generate 1.38 times less return on investment than Salient Select. In addition to that, Pimco Income is 1.12 times more volatile than Salient Select Income. It trades about 0.14 of its total potential returns per unit of risk. Salient Select Income is currently generating about 0.22 per unit of volatility. If you would invest 1,758 in Salient Select Income on September 1, 2024 and sell it today you would earn a total of 213.00 from holding Salient Select Income or generate 12.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.21% |
| Values | Daily Returns |
Pimco Income Strategy vs. Salient Select Income
Performance |
| Timeline |
| Pimco Income Strategy |
| Salient Select Income |
Pimco Income and Salient Select Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pimco Income and Salient Select
The main advantage of trading using opposite Pimco Income and Salient Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco Income position performs unexpectedly, Salient Select 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 Salient Select will offset losses from the drop in Salient Select's long position.| Pimco Income vs. Pcm Fund | Pimco Income vs. Pimco Corporate Income | Pimco Income vs. Pimco Global Stocksplus | Pimco Income vs. Pimco High Income |
| Salient Select vs. Salient Tactical Plus | Salient Select vs. Salient Tactical Plus | Salient Select vs. Salient Tactical Plus | Salient Select vs. Salient Tactical Plus |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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