Correlation Between Short-term Fund and Pimco Income
Can any of the company-specific risk be diversified away by investing in both Short-term Fund and Pimco Income 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 Fund and Pimco Income 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 Income Fund, you can compare the effects of market volatilities on Short-term Fund and Pimco Income 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 Fund with a short position of Pimco Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Short-term Fund and Pimco Income.
Diversification Opportunities for Short-term Fund and Pimco Income
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Short-term and Pimco is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Short Term Fund A and Pimco Income Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco Income and Short-term Fund 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 Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco Income has no effect on the direction of Short-term Fund i.e., Short-term Fund and Pimco Income go up and down completely randomly.
Pair Corralation between Short-term Fund and Pimco Income
Assuming the 90 days horizon Short-term Fund is expected to generate 2.01 times less return on investment than Pimco Income. But when comparing it to its historical volatility, Short Term Fund A is 2.36 times less risky than Pimco Income. It trades about 0.23 of its potential returns per unit of risk. Pimco Income Fund is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 1,053 in Pimco Income Fund on August 31, 2024 and sell it today you would earn a total of 11.00 from holding Pimco Income Fund or generate 1.04% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Short Term Fund A vs. Pimco Income Fund
Performance |
Timeline |
Short Term Fund |
Pimco Income |
Short-term Fund and Pimco Income Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Short-term Fund and Pimco Income
The main advantage of trading using opposite Short-term Fund and Pimco Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Short-term Fund position performs unexpectedly, Pimco Income 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 Income will offset losses from the drop in Pimco Income's long position.Short-term Fund vs. Goldman Sachs Emerging | Short-term Fund vs. Origin Emerging Markets | Short-term Fund vs. Pnc Emerging Markets | Short-term Fund vs. Siit Emerging Markets |
Pimco Income vs. Franklin High Yield | Pimco Income vs. Nuveen Arizona Municipal | Pimco Income vs. Old Westbury Municipal | Pimco Income vs. Ishares Municipal Bond |
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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
Other Complementary Tools
Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets |