Correlation Between Pimco Income and Meridian Equity
Can any of the company-specific risk be diversified away by investing in both Pimco Income and Meridian Equity 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 Meridian Equity 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 Meridian Equity Income, you can compare the effects of market volatilities on Pimco Income and Meridian Equity 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 Meridian Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco Income and Meridian Equity.
Diversification Opportunities for Pimco Income and Meridian Equity
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Pimco and Meridian is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Income Strategy and Meridian Equity Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meridian Equity 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 Meridian Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meridian Equity Income has no effect on the direction of Pimco Income i.e., Pimco Income and Meridian Equity go up and down completely randomly.
Pair Corralation between Pimco Income and Meridian Equity
Considering the 90-day investment horizon Pimco Income is expected to generate 2.75 times less return on investment than Meridian Equity. But when comparing it to its historical volatility, Pimco Income Strategy is 1.26 times less risky than Meridian Equity. It trades about 0.12 of its potential returns per unit of risk. Meridian Equity Income is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 1,456 in Meridian Equity Income on September 1, 2024 and sell it today you would earn a total of 40.00 from holding Meridian Equity Income or generate 2.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Pimco Income Strategy vs. Meridian Equity Income
Performance |
| Timeline |
| Pimco Income Strategy |
| Meridian Equity Income |
Pimco Income and Meridian Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pimco Income and Meridian Equity
The main advantage of trading using opposite Pimco Income and Meridian Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco Income position performs unexpectedly, Meridian Equity 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 Meridian Equity will offset losses from the drop in Meridian Equity'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 |
| Meridian Equity vs. Legg Mason Partners | Meridian Equity vs. Fidelity Capital Income | Meridian Equity vs. Western Asset High | Meridian Equity vs. American Century High |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
Other Complementary Tools
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation |