Correlation Between Pimco High and American Funds
Can any of the company-specific risk be diversified away by investing in both Pimco High and American Funds 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 American Funds 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 American Funds Strategic, you can compare the effects of market volatilities on Pimco High and American Funds 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 American Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco High and American Funds.
Diversification Opportunities for Pimco High and American Funds
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Pimco and American is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Pimco High Yield and American Funds Strategic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Funds Strategic 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 American Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Funds Strategic has no effect on the direction of Pimco High i.e., Pimco High and American Funds go up and down completely randomly.
Pair Corralation between Pimco High and American Funds
Assuming the 90 days horizon Pimco High Yield is expected to generate 0.53 times more return on investment than American Funds. However, Pimco High Yield is 1.9 times less risky than American Funds. It trades about 0.24 of its potential returns per unit of risk. American Funds Strategic is currently generating about 0.07 per unit of risk. If you would invest 876.00 in Pimco High Yield on September 1, 2024 and sell it today you would earn a total of 49.00 from holding Pimco High Yield or generate 5.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pimco High Yield vs. American Funds Strategic
Performance |
| Timeline |
| Pimco High Yield |
| American Funds Strategic |
Pimco High and American Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pimco High and American Funds
The main advantage of trading using opposite Pimco High and American Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco High position performs unexpectedly, American Funds 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 American Funds will offset losses from the drop in American Funds' 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 |
| American Funds vs. Legg Mason Partners | American Funds vs. Franklin High Income | American Funds vs. Western Asset High | American Funds vs. T Rowe Price |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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