Correlation Between Pimco Long and Sextant Bond
Can any of the company-specific risk be diversified away by investing in both Pimco Long and Sextant Bond 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 Long and Sextant Bond into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pimco Long Term Credit and Sextant Bond Income, you can compare the effects of market volatilities on Pimco Long and Sextant Bond 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 Long with a short position of Sextant Bond. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco Long and Sextant Bond.
Diversification Opportunities for Pimco Long and Sextant Bond
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Pimco and Sextant is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Long Term Credit and Sextant Bond Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sextant Bond Income and Pimco Long 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 Long Term Credit are associated (or correlated) with Sextant Bond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sextant Bond Income has no effect on the direction of Pimco Long i.e., Pimco Long and Sextant Bond go up and down completely randomly.
Pair Corralation between Pimco Long and Sextant Bond
Assuming the 90 days horizon Pimco Long Term Credit is expected to under-perform the Sextant Bond. In addition to that, Pimco Long is 1.36 times more volatile than Sextant Bond Income. It trades about -0.6 of its total potential returns per unit of risk. Sextant Bond Income is currently generating about -0.46 per unit of volatility. If you would invest 445.00 in Sextant Bond Income on October 7, 2024 and sell it today you would lose (15.00) from holding Sextant Bond Income or give up 3.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pimco Long Term Credit vs. Sextant Bond Income
Performance |
| Timeline |
| Pimco Long Term |
| Sextant Bond Income |
Pimco Long and Sextant Bond Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pimco Long and Sextant Bond
The main advantage of trading using opposite Pimco Long and Sextant Bond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco Long position performs unexpectedly, Sextant Bond 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 Sextant Bond will offset losses from the drop in Sextant Bond's long position.| Pimco Long vs. T Rowe Price | Pimco Long vs. Blrc Sgy Mnp | Pimco Long vs. Pioneer Amt Free Municipal | Pimco Long vs. Ab Impact Municipal |
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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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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