Correlation Between Pimco Income and Long-term
Can any of the company-specific risk be diversified away by investing in both Pimco Income and Long-term 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 Long-term 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 Long Term Government Fund, you can compare the effects of market volatilities on Pimco Income and Long-term 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 Long-term. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco Income and Long-term.
Diversification Opportunities for Pimco Income and Long-term
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Pimco and Long-term is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Income Fund and Long Term Government Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Long Term Government 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 Long-term. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Long Term Government has no effect on the direction of Pimco Income i.e., Pimco Income and Long-term go up and down completely randomly.
Pair Corralation between Pimco Income and Long-term
Assuming the 90 days horizon Pimco Income Fund is expected to generate 0.33 times more return on investment than Long-term. However, Pimco Income Fund is 3.07 times less risky than Long-term. It trades about 0.09 of its potential returns per unit of risk. Long Term Government Fund is currently generating about 0.0 per unit of risk. If you would invest 969.00 in Pimco Income Fund on August 31, 2024 and sell it today you would earn a total of 97.00 from holding Pimco Income Fund or generate 10.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.73% |
| Values | Daily Returns |
Pimco Income Fund vs. Long Term Government Fund
Performance |
| Timeline |
| Pimco Income |
| Long Term Government |
Pimco Income and Long-term Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pimco Income and Long-term
The main advantage of trading using opposite Pimco Income and Long-term positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco Income position performs unexpectedly, Long-term 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 Long-term will offset losses from the drop in Long-term's long position.| Pimco Income vs. Great West Goldman Sachs | Pimco Income vs. Gold And Precious | Pimco Income vs. Europac Gold Fund | Pimco Income vs. Goldman Sachs Clean |
| Long-term vs. Wisdomtree Siegel Global | Long-term vs. Us Global Investors | Long-term vs. Wasatch Global Opportunities | Long-term vs. Kinetics Global 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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