Correlation Between Thornburg Strategic and Pimco Income
Can any of the company-specific risk be diversified away by investing in both Thornburg Strategic 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 Thornburg Strategic and Pimco Income into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thornburg Strategic Income and Pimco Income Fund, you can compare the effects of market volatilities on Thornburg Strategic 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 Thornburg Strategic with a short position of Pimco Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thornburg Strategic and Pimco Income.
Diversification Opportunities for Thornburg Strategic and Pimco Income
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Thornburg and Pimco is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Thornburg Strategic Income and Pimco Income Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco Income and Thornburg Strategic 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 Thornburg Strategic Income 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 Thornburg Strategic i.e., Thornburg Strategic and Pimco Income go up and down completely randomly.
Pair Corralation between Thornburg Strategic and Pimco Income
Assuming the 90 days horizon Thornburg Strategic is expected to generate 1.13 times less return on investment than Pimco Income. But when comparing it to its historical volatility, Thornburg Strategic Income is 1.26 times less risky than Pimco Income. It trades about 0.11 of its potential returns per unit of risk. Pimco Income Fund is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 965.00 in Pimco Income Fund on September 12, 2024 and sell it today you would earn a total of 102.00 from holding Pimco Income Fund or generate 10.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thornburg Strategic Income vs. Pimco Income Fund
Performance |
| Timeline |
| Thornburg Strategic |
| Pimco Income |
Thornburg Strategic and Pimco Income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thornburg Strategic and Pimco Income
The main advantage of trading using opposite Thornburg Strategic and Pimco Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thornburg Strategic 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.| Thornburg Strategic vs. Pimco Income Fund | Thornburg Strategic vs. Pimco Income Fund | Thornburg Strategic vs. Pimco Incme Fund | Thornburg Strategic vs. Pimco Income Fund |
| Pimco Income vs. Vanguard Financials Index | Pimco Income vs. Blackrock Financial Institutions | Pimco Income vs. Goldman Sachs Financial | Pimco Income vs. Angel Oak Financial |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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