Correlation Between Pimco New and Western Asset
Can any of the company-specific risk be diversified away by investing in both Pimco New and Western Asset 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 New and Western Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pimco New York and Western Asset Global, you can compare the effects of market volatilities on Pimco New and Western Asset 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 New with a short position of Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco New and Western Asset.
Diversification Opportunities for Pimco New and Western Asset
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Pimco and Western is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Pimco New York and Western Asset Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset Global and Pimco New 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 New York are associated (or correlated) with Western Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Asset Global has no effect on the direction of Pimco New i.e., Pimco New and Western Asset go up and down completely randomly.
Pair Corralation between Pimco New and Western Asset
Considering the 90-day investment horizon Pimco New is expected to generate 1.87 times less return on investment than Western Asset. But when comparing it to its historical volatility, Pimco New York is 1.45 times less risky than Western Asset. It trades about 0.17 of its potential returns per unit of risk. Western Asset Global is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 660.00 in Western Asset Global on November 2, 2024 and sell it today you would earn a total of 20.00 from holding Western Asset Global or generate 3.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pimco New York vs. Western Asset Global
Performance |
| Timeline |
| Pimco New York |
| Western Asset Global |
Pimco New and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pimco New and Western Asset
The main advantage of trading using opposite Pimco New and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco New position performs unexpectedly, Western Asset 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 Western Asset will offset losses from the drop in Western Asset's long position.| Pimco New vs. Invesco Pennsylvania Value | Pimco New vs. Blackrock Muniholdings Ny | Pimco New vs. Eaton Vance National | Pimco New vs. Nuveen New York |
| Western Asset vs. Western Asset High | Western Asset vs. BNY Mellon High | Western Asset vs. Allspring Income Opportunities | Western Asset vs. Allianzgi Convertible Income |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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