Correlation Between Pimco Income and Icon Bond
Can any of the company-specific risk be diversified away by investing in both Pimco Income and Icon 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 Income and Icon Bond 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 Icon Bond Fund, you can compare the effects of market volatilities on Pimco Income and Icon 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 Income with a short position of Icon Bond. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco Income and Icon Bond.
Diversification Opportunities for Pimco Income and Icon Bond
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Pimco and Icon is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Income Fund and Icon Bond Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Icon Bond Fund 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 Icon Bond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Icon Bond Fund has no effect on the direction of Pimco Income i.e., Pimco Income and Icon Bond go up and down completely randomly.
Pair Corralation between Pimco Income and Icon Bond
Assuming the 90 days horizon Pimco Income Fund is expected to generate 1.82 times more return on investment than Icon Bond. However, Pimco Income is 1.82 times more volatile than Icon Bond Fund. It trades about 0.15 of its potential returns per unit of risk. Icon Bond Fund is currently generating about 0.26 per unit of risk. If you would invest 959.00 in Pimco Income Fund on September 1, 2024 and sell it today you would earn a total of 107.00 from holding Pimco Income Fund or generate 11.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.63% |
| Values | Daily Returns |
Pimco Income Fund vs. Icon Bond Fund
Performance |
| Timeline |
| Pimco Income |
| Icon Bond Fund |
Pimco Income and Icon Bond Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pimco Income and Icon Bond
The main advantage of trading using opposite Pimco Income and Icon Bond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco Income position performs unexpectedly, Icon 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 Icon Bond will offset losses from the drop in Icon Bond'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 |
| Icon Bond vs. Icon Bond Fund | Icon Bond vs. Icon Equity Income | Icon Bond vs. Icon Longshort Fund | Icon Bond vs. Icon Longshort 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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