Correlation Between Pimco Income and Mainstay Unconstrained
Can any of the company-specific risk be diversified away by investing in both Pimco Income and Mainstay Unconstrained 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 Income and Mainstay Unconstrained into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pimco Income Fund and Mainstay Unconstrained Bond, you can compare the effects of market volatilities on Pimco Income and Mainstay Unconstrained 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 Income with a short position of Mainstay Unconstrained. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco Income and Mainstay Unconstrained.
Diversification Opportunities for Pimco Income and Mainstay Unconstrained
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Pimco and Mainstay is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Income Fund and Mainstay Unconstrained Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Unconstrained and Pimco Income 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 Income Fund are associated (or correlated) with Mainstay Unconstrained. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Unconstrained has no effect on the direction of Pimco Income i.e., Pimco Income and Mainstay Unconstrained go up and down completely randomly.
Pair Corralation between Pimco Income and Mainstay Unconstrained
Assuming the 90 days horizon Pimco Income Fund is expected to generate 1.16 times more return on investment than Mainstay Unconstrained. However, Pimco Income is 1.16 times more volatile than Mainstay Unconstrained Bond. It trades about 0.42 of its potential returns per unit of risk. Mainstay Unconstrained Bond is currently generating about 0.38 per unit of risk. If you would invest 1,048 in Pimco Income Fund on November 18, 2024 and sell it today you would earn a total of 17.00 from holding Pimco Income Fund or generate 1.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pimco Income Fund vs. Mainstay Unconstrained Bond
Performance |
| Timeline |
| Pimco Income |
| Mainstay Unconstrained |
Pimco Income and Mainstay Unconstrained Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pimco Income and Mainstay Unconstrained
The main advantage of trading using opposite Pimco Income and Mainstay Unconstrained positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco Income position performs unexpectedly, Mainstay Unconstrained 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 Mainstay Unconstrained will offset losses from the drop in Mainstay Unconstrained's long position.| Pimco Income vs. Intal High Relative | Pimco Income vs. Tax Managed Large Cap | Pimco Income vs. Wabmsx | Pimco Income vs. Versatile Bond Portfolio |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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