Correlation Between Pimco Income and Mainstay Unconstrained

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Can any of the company-specific risk be diversified away by investing in both Pimco Income and Mainstay Unconstrained 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 Mainstay Unconstrained 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 Mainstay Unconstrained Bond, you can compare the effects of market volatilities on Pimco Income and Mainstay Unconstrained 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 Mainstay Unconstrained. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco Income and Mainstay Unconstrained.

Diversification Opportunities for Pimco Income and Mainstay Unconstrained

0.92
  Correlation Coefficient

Almost no diversification

The 3 months correlation between Pimco and Mainstay is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Income Fund and Mainstay Unconstrained Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Unconstrained 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 Mainstay Unconstrained. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Unconstrained has no effect on the direction of Pimco Income i.e., Pimco Income and Mainstay Unconstrained go up and down completely randomly.

Pair Corralation between Pimco Income and Mainstay Unconstrained

Assuming the 90 days horizon Pimco Income Fund is expected to generate 0.9 times more return on investment than Mainstay Unconstrained. However, Pimco Income Fund is 1.11 times less risky than Mainstay Unconstrained. It trades about 0.17 of its potential returns per unit of risk. Mainstay Unconstrained Bond is currently generating about 0.08 per unit of risk. If you would invest  1,054  in Pimco Income Fund on August 28, 2024 and sell it today you would earn a total of  9.00  from holding Pimco Income Fund or generate 0.85% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

Pimco Income Fund  vs.  Mainstay Unconstrained Bond

 Performance 
       Timeline  
Pimco Income 

Risk-Adjusted Performance

3 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Pimco Income Fund are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Pimco Income is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Mainstay Unconstrained 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Mainstay Unconstrained Bond has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Mainstay Unconstrained is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pimco Income and Mainstay Unconstrained Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Pimco Income and Mainstay Unconstrained

The main advantage of trading using opposite Pimco Income and Mainstay Unconstrained positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco Income position performs unexpectedly, Mainstay Unconstrained 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 Mainstay Unconstrained will offset losses from the drop in Mainstay Unconstrained's long position.
The idea behind Pimco Income Fund and Mainstay Unconstrained Bond pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.

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