Correlation Between Pimco International and Fixed Income
Can any of the company-specific risk be diversified away by investing in both Pimco International and Fixed Income 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 International and Fixed Income into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pimco International Bond and Fixed Income Shares, you can compare the effects of market volatilities on Pimco International and Fixed Income 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 International with a short position of Fixed Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco International and Fixed Income.
Diversification Opportunities for Pimco International and Fixed Income
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Pimco and Fixed is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Pimco International Bond and Fixed Income Shares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fixed Income Shares and Pimco International 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 International Bond are associated (or correlated) with Fixed Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fixed Income Shares has no effect on the direction of Pimco International i.e., Pimco International and Fixed Income go up and down completely randomly.
Pair Corralation between Pimco International and Fixed Income
Assuming the 90 days horizon Pimco International Bond is expected to under-perform the Fixed Income. In addition to that, Pimco International is 1.62 times more volatile than Fixed Income Shares. It trades about -0.05 of its total potential returns per unit of risk. Fixed Income Shares is currently generating about 0.03 per unit of volatility. If you would invest 874.00 in Fixed Income Shares on September 3, 2024 and sell it today you would earn a total of 4.00 from holding Fixed Income Shares or generate 0.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pimco International Bond vs. Fixed Income Shares
Performance |
| Timeline |
| Pimco International Bond |
| Fixed Income Shares |
Pimco International and Fixed Income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pimco International and Fixed Income
The main advantage of trading using opposite Pimco International and Fixed Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco International position performs unexpectedly, Fixed Income 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 Fixed Income will offset losses from the drop in Fixed Income's long position.| Pimco International vs. Small Pany Growth | Pimco International vs. Artisan Small Cap | Pimco International vs. Mid Cap Growth | Pimco International vs. Chase Growth Fund |
| Fixed Income vs. Qs Large Cap | Fixed Income vs. Jhancock Disciplined Value | Fixed Income vs. Dodge Cox Stock | Fixed Income vs. Tax Managed Large Cap |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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