Correlation Between Pimco Senior and Long Term
Can any of the company-specific risk be diversified away by investing in both Pimco Senior and Long Term 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 Senior and Long Term into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pimco Senior Floating and Long Term Government Fund, you can compare the effects of market volatilities on Pimco Senior and Long Term 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 Senior with a short position of Long Term. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco Senior and Long Term.
Diversification Opportunities for Pimco Senior and Long Term
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Pimco and Long is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Senior Floating and Long Term Government Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Long Term Government and Pimco Senior 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 Senior Floating are associated (or correlated) with Long Term. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Long Term Government has no effect on the direction of Pimco Senior i.e., Pimco Senior and Long Term go up and down completely randomly.
Pair Corralation between Pimco Senior and Long Term
Assuming the 90 days horizon Pimco Senior is expected to generate 11.48 times less return on investment than Long Term. But when comparing it to its historical volatility, Pimco Senior Floating is 69.81 times less risky than Long Term. It trades about 0.2 of its potential returns per unit of risk. Long Term Government Fund is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,438 in Long Term Government Fund on September 14, 2024 and sell it today you would lose (21.00) from holding Long Term Government Fund or give up 1.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pimco Senior Floating vs. Long Term Government Fund
Performance |
| Timeline |
| Pimco Senior Floating |
| Long Term Government |
Pimco Senior and Long Term Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pimco Senior and Long Term
The main advantage of trading using opposite Pimco Senior and Long Term positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco Senior position performs unexpectedly, Long Term 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 Long Term will offset losses from the drop in Long Term's long position.| Pimco Senior vs. Pimco Rae Worldwide | Pimco Senior vs. Pimco Rae Worldwide | Pimco Senior vs. Pimco Rae Worldwide | Pimco Senior vs. Pimco Rae Worldwide |
| Long Term vs. Pimco Rae Worldwide | Long Term vs. Pimco Foreign Bond | Long Term vs. Pimco Preferred And | Long Term vs. Pimco Fundamental Advantage |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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