Correlation Between Pimco Total and Western Asset
Can any of the company-specific risk be diversified away by investing in both Pimco Total and Western Asset 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 Total and Western Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pimco Total Return and Western Asset E, you can compare the effects of market volatilities on Pimco Total and Western Asset 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 Total with a short position of Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco Total and Western Asset.
Diversification Opportunities for Pimco Total and Western Asset
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Pimco and Western is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Total Return and Western Asset E in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset E and Pimco Total 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 Total Return are associated (or correlated) with Western Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Asset E has no effect on the direction of Pimco Total i.e., Pimco Total and Western Asset go up and down completely randomly.
Pair Corralation between Pimco Total and Western Asset
Assuming the 90 days horizon Pimco Total Return is expected to generate 0.88 times more return on investment than Western Asset. However, Pimco Total Return is 1.13 times less risky than Western Asset. It trades about -0.05 of its potential returns per unit of risk. Western Asset E is currently generating about -0.06 per unit of risk. If you would invest 872.00 in Pimco Total Return on September 3, 2024 and sell it today you would lose (9.00) from holding Pimco Total Return or give up 1.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pimco Total Return vs. Western Asset E
Performance |
| Timeline |
| Pimco Total Return |
| Western Asset E |
Pimco Total and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pimco Total and Western Asset
The main advantage of trading using opposite Pimco Total and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco Total position performs unexpectedly, Western Asset 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 Western Asset will offset losses from the drop in Western Asset's long position.| Pimco Total vs. Multisector Bond Sma | Pimco Total vs. California Bond Fund | Pimco Total vs. Ab Bond Inflation | Pimco Total vs. Versatile Bond Portfolio |
| Western Asset vs. Metropolitan West Total | Western Asset vs. Metropolitan West Total | Western Asset vs. Pimco Total Return | Western Asset vs. Total Return 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
| Positions Ratings 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 | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world |