Correlation Between Pimco High and Multi Manager
Can any of the company-specific risk be diversified away by investing in both Pimco High and Multi Manager 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 Multi Manager 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 Multi Manager High Yield, you can compare the effects of market volatilities on Pimco High and Multi Manager 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 Multi Manager. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco High and Multi Manager.
Diversification Opportunities for Pimco High and Multi Manager
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between PIMCO and Multi is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Pimco High Yield and Multi Manager High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Multi Manager 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 Yield are associated (or correlated) with Multi Manager. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Multi Manager High has no effect on the direction of Pimco High i.e., Pimco High and Multi Manager go up and down completely randomly.
Pair Corralation between Pimco High and Multi Manager
Assuming the 90 days horizon Pimco High is expected to generate 1.3 times less return on investment than Multi Manager. In addition to that, Pimco High is 1.08 times more volatile than Multi Manager High Yield. It trades about 0.19 of its total potential returns per unit of risk. Multi Manager High Yield is currently generating about 0.27 per unit of volatility. If you would invest 846.00 in Multi Manager High Yield on August 24, 2024 and sell it today you would earn a total of 6.00 from holding Multi Manager High Yield or generate 0.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pimco High Yield vs. Multi Manager High Yield
Performance |
| Timeline |
| Pimco High Yield |
| Multi Manager High |
Pimco High and Multi Manager Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pimco High and Multi Manager
The main advantage of trading using opposite Pimco High and Multi Manager positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco High position performs unexpectedly, Multi Manager 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 Multi Manager will offset losses from the drop in Multi Manager's long position.| Pimco High vs. Nuveen All American Municipal | Pimco High vs. T Rowe Price | Pimco High vs. T Rowe Price | Pimco High vs. Ishares Municipal Bond |
| Multi Manager vs. Prudential High Yield | Multi Manager vs. Parametric Modity Strategy | Multi Manager vs. HUMANA INC | Multi Manager vs. Aquagold International |
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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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