Correlation Between Pimco Income and SPACE
Can any of the company-specific risk be diversified away by investing in both Pimco Income and SPACE 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 SPACE 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 SPACE, you can compare the effects of market volatilities on Pimco Income and SPACE 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 SPACE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco Income and SPACE.
Diversification Opportunities for Pimco Income and SPACE
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Pimco and SPACE is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Income Fund and SPACE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPACE 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 SPACE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPACE has no effect on the direction of Pimco Income i.e., Pimco Income and SPACE go up and down completely randomly.
Pair Corralation between Pimco Income and SPACE
Assuming the 90 days horizon Pimco Income is expected to generate 81.92 times less return on investment than SPACE. But when comparing it to its historical volatility, Pimco Income Fund is 24.24 times less risky than SPACE. It trades about 0.04 of its potential returns per unit of risk. SPACE is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 42.00 in SPACE on August 27, 2024 and sell it today you would earn a total of 6.00 from holding SPACE or generate 14.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pimco Income Fund vs. SPACE
Performance |
| Timeline |
| Pimco Income |
| SPACE |
Pimco Income and SPACE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pimco Income and SPACE
The main advantage of trading using opposite Pimco Income and SPACE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco Income position performs unexpectedly, SPACE 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 SPACE will offset losses from the drop in SPACE's long position.| Pimco Income vs. Pimco Rae Worldwide | Pimco Income vs. Pimco Rae Worldwide | Pimco Income vs. Pimco Rae Worldwide | Pimco Income vs. Pimco Rae Worldwide |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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