Correlation Between Pimco Income and Sextant Growth
Can any of the company-specific risk be diversified away by investing in both Pimco Income and Sextant Growth 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 Growth 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 Growth Fund, you can compare the effects of market volatilities on Pimco Income and Sextant Growth 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 Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco Income and Sextant Growth.
Diversification Opportunities for Pimco Income and Sextant Growth
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Pimco and Sextant is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Income Strategy and Sextant Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sextant Growth 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 Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sextant Growth has no effect on the direction of Pimco Income i.e., Pimco Income and Sextant Growth go up and down completely randomly.
Pair Corralation between Pimco Income and Sextant Growth
Considering the 90-day investment horizon Pimco Income is expected to generate 9.62 times less return on investment than Sextant Growth. But when comparing it to its historical volatility, Pimco Income Strategy is 2.26 times less risky than Sextant Growth. It trades about 0.03 of its potential returns per unit of risk. Sextant Growth Fund is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 5,572 in Sextant Growth Fund on September 13, 2024 and sell it today you would earn a total of 308.00 from holding Sextant Growth Fund or generate 5.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 97.67% |
| Values | Daily Returns |
Pimco Income Strategy vs. Sextant Growth Fund
Performance |
| Timeline |
| Pimco Income Strategy |
| Sextant Growth |
Pimco Income and Sextant Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pimco Income and Sextant Growth
The main advantage of trading using opposite Pimco Income and Sextant Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco Income position performs unexpectedly, Sextant Growth 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 Growth will offset losses from the drop in Sextant Growth's long position.| Pimco Income vs. Pimco Income Strategy | Pimco Income vs. Pimco Corporate Income | Pimco Income vs. PIMCO Access Income | Pimco Income vs. Pimco Global Stocksplus |
| Sextant Growth vs. Sextant International Fund | Sextant Growth vs. Sextant Bond Income | Sextant Growth vs. Teton Westwood Equity | Sextant Growth vs. Value Line Premier |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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