Correlation Between Pimco Credit and Pimco Trends
Can any of the company-specific risk be diversified away by investing in both Pimco Credit and Pimco Trends 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 Credit and Pimco Trends into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pimco Credit Absolute and Pimco Trends Managed, you can compare the effects of market volatilities on Pimco Credit and Pimco Trends 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 Credit with a short position of Pimco Trends. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco Credit and Pimco Trends.
Diversification Opportunities for Pimco Credit and Pimco Trends
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Pimco and Pimco is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Credit Absolute and Pimco Trends Managed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco Trends Managed and Pimco Credit 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 Credit Absolute are associated (or correlated) with Pimco Trends. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco Trends Managed has no effect on the direction of Pimco Credit i.e., Pimco Credit and Pimco Trends go up and down completely randomly.
Pair Corralation between Pimco Credit and Pimco Trends
Assuming the 90 days horizon Pimco Credit Absolute is expected to generate 0.5 times more return on investment than Pimco Trends. However, Pimco Credit Absolute is 2.0 times less risky than Pimco Trends. It trades about 0.13 of its potential returns per unit of risk. Pimco Trends Managed is currently generating about -0.04 per unit of risk. If you would invest 811.00 in Pimco Credit Absolute on August 27, 2024 and sell it today you would earn a total of 161.00 from holding Pimco Credit Absolute or generate 19.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pimco Credit Absolute vs. Pimco Trends Managed
Performance |
| Timeline |
| Pimco Credit Absolute |
| Pimco Trends Managed |
Pimco Credit and Pimco Trends Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pimco Credit and Pimco Trends
The main advantage of trading using opposite Pimco Credit and Pimco Trends positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco Credit position performs unexpectedly, Pimco Trends 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 Trends will offset losses from the drop in Pimco Trends' long position.| Pimco Credit vs. Pimco Rae Worldwide | Pimco Credit vs. Pimco Rae Worldwide | Pimco Credit vs. Pimco Rae Worldwide | Pimco Credit vs. Pimco Rae Worldwide |
| Pimco Trends vs. Fidelity Sai International | Pimco Trends vs. Fidelity Sai Minimum | Pimco Trends vs. Fidelity Sai Treasury | Pimco Trends vs. Fidelity Sai Emerging |
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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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