Correlation Between Pimco High and Pimco Capital
Can any of the company-specific risk be diversified away by investing in both Pimco High and Pimco Capital 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 Pimco Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pimco High Yield and Pimco Capital Sec, you can compare the effects of market volatilities on Pimco High and Pimco Capital 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 Pimco Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco High and Pimco Capital.
Diversification Opportunities for Pimco High and Pimco Capital
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Pimco and Pimco is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Pimco High Yield and Pimco Capital Sec in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco Capital Sec 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 Yield are associated (or correlated) with Pimco Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco Capital Sec has no effect on the direction of Pimco High i.e., Pimco High and Pimco Capital go up and down completely randomly.
Pair Corralation between Pimco High and Pimco Capital
Assuming the 90 days horizon Pimco High is expected to generate 1.12 times less return on investment than Pimco Capital. But when comparing it to its historical volatility, Pimco High Yield is 1.43 times less risky than Pimco Capital. It trades about 0.09 of its potential returns per unit of risk. Pimco Capital Sec is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 816.00 in Pimco Capital Sec on August 25, 2024 and sell it today you would earn a total of 117.00 from holding Pimco Capital Sec or generate 14.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pimco High Yield vs. Pimco Capital Sec
Performance |
| Timeline |
| Pimco High Yield |
| Pimco Capital Sec |
Pimco High and Pimco Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pimco High and Pimco Capital
The main advantage of trading using opposite Pimco High and Pimco Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco High position performs unexpectedly, Pimco Capital 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 Capital will offset losses from the drop in Pimco Capital's long position.| Pimco High vs. Pimco Rae Worldwide | Pimco High vs. Pimco Rae Worldwide | Pimco High vs. Pimco Rae Worldwide | Pimco High vs. Pimco Rae Worldwide |
| Pimco Capital vs. Pimco Mortgage Opportunities | Pimco Capital vs. Pimco Floating Income | Pimco Capital vs. Pimco High Yield | Pimco Capital vs. Pimco Income Fund |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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