Correlation Between Pimco Income and Federated Total
Can any of the company-specific risk be diversified away by investing in both Pimco Income and Federated Total 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 Federated Total 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 Federated Total Return, you can compare the effects of market volatilities on Pimco Income and Federated Total 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 Federated Total. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco Income and Federated Total.
Diversification Opportunities for Pimco Income and Federated Total
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Pimco and Federated is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Income Fund and Federated Total Return in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Total Return 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 Federated Total. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Total Return has no effect on the direction of Pimco Income i.e., Pimco Income and Federated Total go up and down completely randomly.
Pair Corralation between Pimco Income and Federated Total
Assuming the 90 days horizon Pimco Income is expected to generate 1.03 times less return on investment than Federated Total. But when comparing it to its historical volatility, Pimco Income Fund is 1.44 times less risky than Federated Total. It trades about 0.13 of its potential returns per unit of risk. Federated Total Return is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 917.00 in Federated Total Return on September 1, 2024 and sell it today you would earn a total of 36.00 from holding Federated Total Return or generate 3.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.21% |
| Values | Daily Returns |
Pimco Income Fund vs. Federated Total Return
Performance |
| Timeline |
| Pimco Income |
| Federated Total Return |
Pimco Income and Federated Total Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pimco Income and Federated Total
The main advantage of trading using opposite Pimco Income and Federated Total positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco Income position performs unexpectedly, Federated Total 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 Federated Total will offset losses from the drop in Federated Total's long position.| Pimco Income vs. Fidelity Real Estate | Pimco Income vs. Guggenheim Risk Managed | Pimco Income vs. Commonwealth Real Estate | Pimco Income vs. Msif Real Estate |
| Federated Total vs. Goldman Sachs Emerging | Federated Total vs. Transamerica Emerging Markets | Federated Total vs. Ab All Market | Federated Total vs. Aqr Long Short 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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