Correlation Between Pimco Income and Muzinich Credit
Can any of the company-specific risk be diversified away by investing in both Pimco Income and Muzinich Credit 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 Muzinich Credit 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 Muzinich Credit Opportunities, you can compare the effects of market volatilities on Pimco Income and Muzinich Credit 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 Muzinich Credit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco Income and Muzinich Credit.
Diversification Opportunities for Pimco Income and Muzinich Credit
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Pimco and Muzinich is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Income Fund and Muzinich Credit Opportunities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Muzinich Credit Oppo 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 Muzinich Credit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Muzinich Credit Oppo has no effect on the direction of Pimco Income i.e., Pimco Income and Muzinich Credit go up and down completely randomly.
Pair Corralation between Pimco Income and Muzinich Credit
Assuming the 90 days horizon Pimco Income Fund is expected to generate 1.24 times more return on investment than Muzinich Credit. However, Pimco Income is 1.24 times more volatile than Muzinich Credit Opportunities. It trades about 0.26 of its potential returns per unit of risk. Muzinich Credit Opportunities is currently generating about 0.29 per unit of risk. If you would invest 1,053 in Pimco Income Fund on September 2, 2024 and sell it today you would earn a total of 13.00 from holding Pimco Income Fund or generate 1.23% 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. Muzinich Credit Opportunities
Performance |
| Timeline |
| Pimco Income |
| Muzinich Credit Oppo |
Pimco Income and Muzinich Credit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pimco Income and Muzinich Credit
The main advantage of trading using opposite Pimco Income and Muzinich Credit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco Income position performs unexpectedly, Muzinich Credit 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 Muzinich Credit will offset losses from the drop in Muzinich Credit's long position.| Pimco Income vs. Siit Ultra Short | Pimco Income vs. Sterling Capital Short | Pimco Income vs. Chartwell Short Duration | Pimco Income vs. Franklin Federal Limited Term |
| Muzinich Credit vs. Diversified Income Fund | Muzinich Credit vs. Muzinich Credit Opportunities | Muzinich Credit vs. Muzinich High Yield | Muzinich Credit vs. Muzinich High Yield |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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