Correlation Between Short Term and Pimco Floating
Can any of the company-specific risk be diversified away by investing in both Short Term and Pimco Floating 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 Short Term and Pimco Floating into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Short Term Fund A and Pimco Floating Income, you can compare the effects of market volatilities on Short Term and Pimco Floating 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 Short Term with a short position of Pimco Floating. Check out your portfolio center. Please also check ongoing floating volatility patterns of Short Term and Pimco Floating.
Diversification Opportunities for Short Term and Pimco Floating
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Short and Pimco is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Short Term Fund A and Pimco Floating Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco Floating Income and Short Term 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 Short Term Fund A are associated (or correlated) with Pimco Floating. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco Floating Income has no effect on the direction of Short Term i.e., Short Term and Pimco Floating go up and down completely randomly.
Pair Corralation between Short Term and Pimco Floating
Assuming the 90 days horizon Short Term is expected to generate 1.34 times less return on investment than Pimco Floating. But when comparing it to its historical volatility, Short Term Fund A is 1.88 times less risky than Pimco Floating. It trades about 0.24 of its potential returns per unit of risk. Pimco Floating Income is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 733.00 in Pimco Floating Income on September 12, 2024 and sell it today you would earn a total of 80.00 from holding Pimco Floating Income or generate 10.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Short Term Fund A vs. Pimco Floating Income
Performance |
| Timeline |
| Short Term Fund |
| Pimco Floating Income |
Short Term and Pimco Floating Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Short Term and Pimco Floating
The main advantage of trading using opposite Short Term and Pimco Floating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Short Term position performs unexpectedly, Pimco Floating 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 Pimco Floating will offset losses from the drop in Pimco Floating's long position.| Short Term vs. SCOR PK | Short Term vs. Morningstar Unconstrained Allocation | Short Term vs. Via Renewables | Short Term vs. Bondbloxx ETF Trust |
| Pimco Floating vs. Short Term Fund A | Pimco Floating vs. Pimco Income Fund | Pimco Floating vs. Pimco Foreign Bond | Pimco Floating vs. All Asset 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Equity Valuation Check real value of public entities based on technical and fundamental data |