Correlation Between High Yield and Pimco Short
Can any of the company-specific risk be diversified away by investing in both High Yield and Pimco Short 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 High Yield and Pimco Short into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between High Yield Fund and Pimco Short Asset, you can compare the effects of market volatilities on High Yield and Pimco Short 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 High Yield with a short position of Pimco Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of High Yield and Pimco Short.
Diversification Opportunities for High Yield and Pimco Short
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between High and Pimco is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding High Yield Fund and Pimco Short Asset in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco Short Asset and High Yield 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 High Yield Fund are associated (or correlated) with Pimco Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco Short Asset has no effect on the direction of High Yield i.e., High Yield and Pimco Short go up and down completely randomly.
Pair Corralation between High Yield and Pimco Short
Assuming the 90 days horizon High Yield Fund is expected to generate 2.63 times more return on investment than Pimco Short. However, High Yield is 2.63 times more volatile than Pimco Short Asset. It trades about 0.16 of its potential returns per unit of risk. Pimco Short Asset is currently generating about 0.23 per unit of risk. If you would invest 586.00 in High Yield Fund on September 2, 2024 and sell it today you would earn a total of 93.00 from holding High Yield Fund or generate 15.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
High Yield Fund vs. Pimco Short Asset
Performance |
| Timeline |
| High Yield Fund |
| Pimco Short Asset |
High Yield and Pimco Short Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with High Yield and Pimco Short
The main advantage of trading using opposite High Yield and Pimco Short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if High Yield position performs unexpectedly, Pimco Short 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 Short will offset losses from the drop in Pimco Short's long position.| High Yield vs. Bbh Intermediate Municipal | High Yield vs. Dreyfusstandish Global Fixed | High Yield vs. Multisector Bond Sma | High Yield vs. T Rowe Price |
| Pimco Short vs. Aqr Managed Futures | Pimco Short vs. Blackrock Inflation Protected | Pimco Short vs. Western Asset Inflation | Pimco Short vs. Ab Bond Inflation |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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