Correlation Between Pimco High and Western Asset
Can any of the company-specific risk be diversified away by investing in both Pimco High and Western Asset 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 High and Western Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pimco High Income and Western Asset High, you can compare the effects of market volatilities on Pimco High and Western Asset 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 High with a short position of Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco High and Western Asset.
Diversification Opportunities for Pimco High and Western Asset
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Pimco and Western is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Pimco High Income and Western Asset High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset High and Pimco High 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 High Income are associated (or correlated) with Western Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Asset High has no effect on the direction of Pimco High i.e., Pimco High and Western Asset go up and down completely randomly.
Pair Corralation between Pimco High and Western Asset
Considering the 90-day investment horizon Pimco High Income is expected to generate 0.91 times more return on investment than Western Asset. However, Pimco High Income is 1.1 times less risky than Western Asset. It trades about 0.18 of its potential returns per unit of risk. Western Asset High is currently generating about 0.08 per unit of risk. If you would invest 472.00 in Pimco High Income on September 2, 2024 and sell it today you would earn a total of 30.00 from holding Pimco High Income or generate 6.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pimco High Income vs. Western Asset High
Performance |
| Timeline |
| Pimco High Income |
| Western Asset High |
Pimco High and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pimco High and Western Asset
The main advantage of trading using opposite Pimco High and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco High position performs unexpectedly, Western Asset 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 Western Asset will offset losses from the drop in Western Asset's long position.| Pimco High vs. Pcm Fund | Pimco High vs. Pimco Income Strategy | Pimco High vs. Pimco Corporate Income | Pimco High vs. PIMCO Access Income |
| Western Asset vs. Western Asset Global | Western Asset vs. Western Asset Global | Western Asset vs. European Equity Closed | Western Asset vs. Western Asset 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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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