Correlation Between Pimco High and Virtus Westchester
Can any of the company-specific risk be diversified away by investing in both Pimco High and Virtus Westchester 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 Virtus Westchester 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 Virtus Westchester Credit, you can compare the effects of market volatilities on Pimco High and Virtus Westchester 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 Virtus Westchester. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco High and Virtus Westchester.
Diversification Opportunities for Pimco High and Virtus Westchester
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Pimco and Virtus is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Pimco High Income and Virtus Westchester Credit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virtus Westchester Credit 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 Virtus Westchester. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virtus Westchester Credit has no effect on the direction of Pimco High i.e., Pimco High and Virtus Westchester go up and down completely randomly.
Pair Corralation between Pimco High and Virtus Westchester
Considering the 90-day investment horizon Pimco High Income is expected to generate 7.96 times more return on investment than Virtus Westchester. However, Pimco High is 7.96 times more volatile than Virtus Westchester Credit. It trades about 0.06 of its potential returns per unit of risk. Virtus Westchester Credit is currently generating about 0.39 per unit of risk. If you would invest 499.00 in Pimco High Income on September 14, 2024 and sell it today you would earn a total of 4.00 from holding Pimco High Income or generate 0.8% 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. Virtus Westchester Credit
Performance |
| Timeline |
| Pimco High Income |
| Virtus Westchester Credit |
Pimco High and Virtus Westchester Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pimco High and Virtus Westchester
The main advantage of trading using opposite Pimco High and Virtus Westchester positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco High position performs unexpectedly, Virtus Westchester 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 Virtus Westchester will offset losses from the drop in Virtus Westchester'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 |
| Virtus Westchester vs. Washington Mutual Investors | Virtus Westchester vs. Fisher Large Cap | Virtus Westchester vs. Qs Large Cap | Virtus Westchester vs. Guidemark 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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