Correlation Between Procter Gamble and Pimco Income
Can any of the company-specific risk be diversified away by investing in both Procter Gamble and Pimco 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 Procter Gamble and Pimco Income into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Procter Gamble and Pimco Income Strategy, you can compare the effects of market volatilities on Procter Gamble and Pimco 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 Procter Gamble with a short position of Pimco Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Procter Gamble and Pimco Income.
Diversification Opportunities for Procter Gamble and Pimco Income
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Procter and Pimco is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Procter Gamble and Pimco Income Strategy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco Income Strategy and Procter Gamble 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 Procter Gamble are associated (or correlated) with Pimco Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco Income Strategy has no effect on the direction of Procter Gamble i.e., Procter Gamble and Pimco Income go up and down completely randomly.
Pair Corralation between Procter Gamble and Pimco Income
Allowing for the 90-day total investment horizon Procter Gamble is expected to generate 2.53 times more return on investment than Pimco Income. However, Procter Gamble is 2.53 times more volatile than Pimco Income Strategy. It trades about 0.09 of its potential returns per unit of risk. Pimco Income Strategy is currently generating about 0.18 per unit of risk. If you would invest 16,807 in Procter Gamble on August 28, 2024 and sell it today you would earn a total of 932.00 from holding Procter Gamble or generate 5.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Procter Gamble vs. Pimco Income Strategy
Performance |
| Timeline |
| Procter Gamble |
| Pimco Income Strategy |
Procter Gamble and Pimco Income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Procter Gamble and Pimco Income
The main advantage of trading using opposite Procter Gamble and Pimco Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Procter Gamble position performs unexpectedly, Pimco 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 Pimco Income will offset losses from the drop in Pimco Income's long position.| Procter Gamble vs. Unilever PLC ADR | Procter Gamble vs. Estee Lauder Companies | Procter Gamble vs. ELF Beauty | Procter Gamble vs. Coty Inc |
| Pimco Income vs. Pimco Dynamic Income | Pimco Income vs. Guggenheim Strategic Opportunities | Pimco Income vs. Pimco Dynamic Income | Pimco Income vs. BlackRock Limited Duration |
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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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