Correlation Between Pimco Income and American Beacon
Can any of the company-specific risk be diversified away by investing in both Pimco Income and American Beacon 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 American Beacon 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 American Beacon Funds, you can compare the effects of market volatilities on Pimco Income and American Beacon 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 American Beacon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco Income and American Beacon.
Diversification Opportunities for Pimco Income and American Beacon
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Pimco and American is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Income Fund and American Beacon Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Beacon Funds 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 American Beacon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Beacon Funds has no effect on the direction of Pimco Income i.e., Pimco Income and American Beacon go up and down completely randomly.
Pair Corralation between Pimco Income and American Beacon
Assuming the 90 days horizon Pimco Income is expected to generate 1.21 times less return on investment than American Beacon. In addition to that, Pimco Income is 1.53 times more volatile than American Beacon Funds. It trades about 0.13 of its total potential returns per unit of risk. American Beacon Funds is currently generating about 0.25 per unit of volatility. If you would invest 820.00 in American Beacon Funds on September 1, 2024 and sell it today you would earn a total of 38.00 from holding American Beacon Funds or generate 4.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pimco Income Fund vs. American Beacon Funds
Performance |
| Timeline |
| Pimco Income |
| American Beacon Funds |
Pimco Income and American Beacon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pimco Income and American Beacon
The main advantage of trading using opposite Pimco Income and American Beacon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco Income position performs unexpectedly, American Beacon 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 American Beacon will offset losses from the drop in American Beacon'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 |
| American Beacon vs. Federated Institutional High | American Beacon vs. Pace High Yield | American Beacon vs. Dunham High Yield | American Beacon vs. Valic Company I |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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