Correlation Between Pimco Income and Ubs Total
Can any of the company-specific risk be diversified away by investing in both Pimco Income and Ubs Total 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 Ubs Total 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 Ubs Total Return, you can compare the effects of market volatilities on Pimco Income and Ubs Total 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 Ubs Total. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco Income and Ubs Total.
Diversification Opportunities for Pimco Income and Ubs Total
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Pimco and Ubs is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Income Fund and Ubs Total Return in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ubs Total Return 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 Ubs Total. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ubs Total Return has no effect on the direction of Pimco Income i.e., Pimco Income and Ubs Total go up and down completely randomly.
Pair Corralation between Pimco Income and Ubs Total
Assuming the 90 days horizon Pimco Income is expected to generate 1.47 times less return on investment than Ubs Total. But when comparing it to its historical volatility, Pimco Income Fund is 1.2 times less risky than Ubs Total. It trades about 0.18 of its potential returns per unit of risk. Ubs Total Return is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 1,331 in Ubs Total Return on September 14, 2024 and sell it today you would earn a total of 13.00 from holding Ubs Total Return or generate 0.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pimco Income Fund vs. Ubs Total Return
Performance |
| Timeline |
| Pimco Income |
| Ubs Total Return |
Pimco Income and Ubs Total Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pimco Income and Ubs Total
The main advantage of trading using opposite Pimco Income and Ubs Total positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco Income position performs unexpectedly, Ubs Total 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 Ubs Total will offset losses from the drop in Ubs Total's long position.| Pimco Income vs. Barings Active Short | Pimco Income vs. Touchstone Ultra Short | Pimco Income vs. Angel Oak Ultrashort | Pimco Income vs. Aqr Long Short Equity |
| Ubs Total vs. Buffalo High Yield | Ubs Total vs. Gmo High Yield | Ubs Total vs. Janus High Yield Fund | Ubs Total vs. Neuberger Berman Income |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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