Correlation Between Pimco Income and Baird Core
Can any of the company-specific risk be diversified away by investing in both Pimco Income and Baird Core 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 Baird Core 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 Baird E Plus, you can compare the effects of market volatilities on Pimco Income and Baird Core 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 Baird Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco Income and Baird Core.
Diversification Opportunities for Pimco Income and Baird Core
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Pimco and Baird is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Income Fund and Baird E Plus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baird E Plus 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 Baird Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baird E Plus has no effect on the direction of Pimco Income i.e., Pimco Income and Baird Core go up and down completely randomly.
Pair Corralation between Pimco Income and Baird Core
Assuming the 90 days horizon Pimco Income Fund is expected to generate 0.73 times more return on investment than Baird Core. However, Pimco Income Fund is 1.37 times less risky than Baird Core. It trades about 0.06 of its potential returns per unit of risk. Baird E Plus is currently generating about -0.06 per unit of risk. If you would invest 1,054 in Pimco Income Fund on August 26, 2024 and sell it today you would earn a total of 3.00 from holding Pimco Income Fund or generate 0.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pimco Income Fund vs. Baird E Plus
Performance |
| Timeline |
| Pimco Income |
| Baird E Plus |
Pimco Income and Baird Core Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pimco Income and Baird Core
The main advantage of trading using opposite Pimco Income and Baird Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco Income position performs unexpectedly, Baird Core 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 Baird Core will offset losses from the drop in Baird Core's long position.| Pimco Income vs. Pimco Rae Worldwide | Pimco Income vs. Pimco Rae Worldwide | Pimco Income vs. Pimco Rae Worldwide | Pimco Income vs. Pimco Rae Worldwide |
| Baird Core vs. Income Fund Income | Baird Core vs. Artisan International Value | Baird Core vs. Prudential Total Return | Baird Core vs. Pimco Income Fund |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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