Correlation Between Pimco Income and Franklin Strategic
Can any of the company-specific risk be diversified away by investing in both Pimco Income and Franklin Strategic 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 Franklin Strategic 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 Franklin Strategic Income, you can compare the effects of market volatilities on Pimco Income and Franklin Strategic 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 Franklin Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco Income and Franklin Strategic.
Diversification Opportunities for Pimco Income and Franklin Strategic
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Pimco and FRANKLIN is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Income Fund and Franklin Strategic Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Strategic Income 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 Franklin Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Strategic Income has no effect on the direction of Pimco Income i.e., Pimco Income and Franklin Strategic go up and down completely randomly.
Pair Corralation between Pimco Income and Franklin Strategic
Assuming the 90 days horizon Pimco Income Fund is expected to generate 1.11 times more return on investment than Franklin Strategic. However, Pimco Income is 1.11 times more volatile than Franklin Strategic Income. It trades about 0.13 of its potential returns per unit of risk. Franklin Strategic Income is currently generating about 0.14 per unit of risk. If you would invest 1,029 in Pimco Income Fund on September 3, 2024 and sell it today you would earn a total of 37.00 from holding Pimco Income Fund or generate 3.6% 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. Franklin Strategic Income
Performance |
| Timeline |
| Pimco Income |
| Franklin Strategic Income |
Pimco Income and Franklin Strategic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pimco Income and Franklin Strategic
The main advantage of trading using opposite Pimco Income and Franklin Strategic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco Income position performs unexpectedly, Franklin Strategic 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 Franklin Strategic will offset losses from the drop in Franklin Strategic's long position.| Pimco Income vs. Dreyfusstandish Global Fixed | Pimco Income vs. Doubleline Global Bond | Pimco Income vs. Commonwealth Global Fund | Pimco Income vs. Ab Global Bond |
| Franklin Strategic vs. Pimco Income Fund | Franklin Strategic vs. Pimco Income Fund | Franklin Strategic vs. Pimco Income Fund | Franklin Strategic 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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