Correlation Between Pimco Income and Mainstay Unconstrained
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
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Pimco and Mainstay is 0.89. 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 is expected to generate 1.24 times less return on investment than Mainstay Unconstrained. But when comparing it to its historical volatility, Pimco Income Fund is 1.08 times less risky than Mainstay Unconstrained. It trades about 0.12 of its potential returns per unit of risk. Mainstay Unconstrained Bond is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 784.00 in Mainstay Unconstrained Bond on August 24, 2024 and sell it today you would earn a total of 80.00 from holding Mainstay Unconstrained Bond or generate 10.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.6% |
| Values | Daily Returns |
Pimco Income Fund vs. Mainstay Unconstrained Bond
Performance |
| Timeline |
| Pimco Income |
| Mainstay Unconstrained |
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.| Pimco Income vs. Barings Active Short | Pimco Income vs. Limited Term Tax | Pimco Income vs. Mirova Global Green | Pimco Income vs. Chartwell Short Duration |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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