Correlation Between Pimco Income and Sextant Bond

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Pimco Income and Sextant Bond 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 Sextant Bond 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 Sextant Bond Income, you can compare the effects of market volatilities on Pimco Income and Sextant Bond 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 Sextant Bond. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco Income and Sextant Bond.

Diversification Opportunities for Pimco Income and Sextant Bond

0.36
  Correlation Coefficient

Weak diversification

The 3 months correlation between Pimco and Sextant is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Income Strategy and Sextant Bond Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sextant Bond 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 Sextant Bond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sextant Bond Income has no effect on the direction of Pimco Income i.e., Pimco Income and Sextant Bond go up and down completely randomly.

Pair Corralation between Pimco Income and Sextant Bond

Considering the 90-day investment horizon Pimco Income Strategy is expected to generate 1.04 times more return on investment than Sextant Bond. However, Pimco Income is 1.04 times more volatile than Sextant Bond Income. It trades about 0.0 of its potential returns per unit of risk. Sextant Bond Income is currently generating about -0.46 per unit of risk. If you would invest  750.00  in Pimco Income Strategy on October 7, 2024 and sell it today you would earn a total of  0.00  from holding Pimco Income Strategy or generate 0.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Pimco Income Strategy  vs.  Sextant Bond Income

 Performance 
       Timeline  
Pimco Income Strategy 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Pimco Income Strategy has generated negative risk-adjusted returns adding no value to fund investors. In spite of very healthy technical and fundamental indicators, Pimco Income is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.
Sextant Bond Income 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Sextant Bond Income has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, Sextant Bond is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pimco Income and Sextant Bond Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Pimco Income and Sextant Bond

The main advantage of trading using opposite Pimco Income and Sextant Bond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco Income position performs unexpectedly, Sextant Bond 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 Sextant Bond will offset losses from the drop in Sextant Bond's long position.
The idea behind Pimco Income Strategy and Sextant Bond Income pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.

Other Complementary Tools

AI Portfolio Architect
Use AI to generate optimal portfolios and find profitable investment opportunities
Portfolio Anywhere
Track or share privately all of your investments from the convenience of any device
Stocks Directory
Find actively traded stocks across global markets
Price Ceiling Movement
Calculate and plot Price Ceiling Movement for different equity instruments
Economic Indicators
Top statistical indicators that provide insights into how an economy is performing