Correlation Between Pimco Income and Pimco High
Can any of the company-specific risk be diversified away by investing in both Pimco Income and Pimco High 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 Pimco High 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 Pimco High Yield, you can compare the effects of market volatilities on Pimco Income and Pimco High 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 Pimco High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco Income and Pimco High.
Diversification Opportunities for Pimco Income and Pimco High
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Pimco and Pimco is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Income Fund and Pimco High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco High Yield 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 Pimco High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco High Yield has no effect on the direction of Pimco Income i.e., Pimco Income and Pimco High go up and down completely randomly.
Pair Corralation between Pimco Income and Pimco High
Assuming the 90 days horizon Pimco Income Fund is expected to generate 0.84 times more return on investment than Pimco High. However, Pimco Income Fund is 1.19 times less risky than Pimco High. It trades about 0.16 of its potential returns per unit of risk. Pimco High Yield is currently generating about 0.13 per unit of risk. If you would invest 1,021 in Pimco Income Fund on September 5, 2024 and sell it today you would earn a total of 45.00 from holding Pimco Income Fund or generate 4.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.2% |
| Values | Daily Returns |
Pimco Income Fund vs. Pimco High Yield
Performance |
| Timeline |
| Pimco Income |
| Pimco High Yield |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Insignificant
Pimco Income and Pimco High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pimco Income and Pimco High
The main advantage of trading using opposite Pimco Income and Pimco High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco Income position performs unexpectedly, Pimco High 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 High will offset losses from the drop in Pimco High's long position.| Pimco Income vs. Doubleline Total Return | Pimco Income vs. Investment Grade Porate | Pimco Income vs. Pimco Foreign Bond | Pimco Income vs. Metropolitan West Total |
| Pimco High vs. Locorr Dynamic Equity | Pimco High vs. Rbc Global Equity | Pimco High vs. Small Cap Equity | Pimco High vs. Artisan Select Equity |
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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