Correlation Between Pimco High and Pacific Funds
Can any of the company-specific risk be diversified away by investing in both Pimco High and Pacific 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 Pacific 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 Pacific Funds High, you can compare the effects of market volatilities on Pimco High and Pacific 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 Pacific Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco High and Pacific Funds.
Diversification Opportunities for Pimco High and Pacific Funds
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Pimco and Pacific is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Pimco High Yield and Pacific Funds High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pacific Funds 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 Pacific Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pacific Funds High has no effect on the direction of Pimco High i.e., Pimco High and Pacific Funds go up and down completely randomly.
Pair Corralation between Pimco High and Pacific Funds
Assuming the 90 days horizon Pimco High Yield is expected to generate 0.76 times more return on investment than Pacific Funds. However, Pimco High Yield is 1.31 times less risky than Pacific Funds. It trades about 0.15 of its potential returns per unit of risk. Pacific Funds High is currently generating about 0.12 per unit of risk. If you would invest 921.00 in Pimco High Yield on September 1, 2024 and sell it today you would earn a total of 4.00 from holding Pimco High Yield or generate 0.43% 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. Pacific Funds High
Performance |
| Timeline |
| Pimco High Yield |
| Pacific Funds High |
Pimco High and Pacific Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pimco High and Pacific Funds
The main advantage of trading using opposite Pimco High and Pacific Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco High position performs unexpectedly, Pacific 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 Pacific Funds will offset losses from the drop in Pacific 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 |
| Pacific Funds vs. Siit Emerging Markets | Pacific Funds vs. Rbc Emerging Markets | Pacific Funds vs. Barings Emerging Markets | Pacific Funds vs. Goldman Sachs Emerging |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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