Correlation Between Western Asset and Pimco Low
Can any of the company-specific risk be diversified away by investing in both Western Asset and Pimco Low 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 Western Asset and Pimco Low into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Asset Inflation and Pimco Low Duration, you can compare the effects of market volatilities on Western Asset and Pimco Low 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 Western Asset with a short position of Pimco Low. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Pimco Low.
Diversification Opportunities for Western Asset and Pimco Low
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Western and Pimco is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Inflation and Pimco Low Duration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco Low Duration and Western Asset 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 Western Asset Inflation are associated (or correlated) with Pimco Low. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco Low Duration has no effect on the direction of Western Asset i.e., Western Asset and Pimco Low go up and down completely randomly.
Pair Corralation between Western Asset and Pimco Low
Assuming the 90 days horizon Western Asset is expected to generate 1.61 times less return on investment than Pimco Low. In addition to that, Western Asset is 2.11 times more volatile than Pimco Low Duration. It trades about 0.06 of its total potential returns per unit of risk. Pimco Low Duration is currently generating about 0.19 per unit of volatility. If you would invest 750.00 in Pimco Low Duration on September 4, 2024 and sell it today you would earn a total of 62.00 from holding Pimco Low Duration or generate 8.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Asset Inflation vs. Pimco Low Duration
Performance |
| Timeline |
| Western Asset Inflation |
| Pimco Low Duration |
Western Asset and Pimco Low Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Pimco Low
The main advantage of trading using opposite Western Asset and Pimco Low positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, Pimco Low 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 Low will offset losses from the drop in Pimco Low's long position.| Western Asset vs. Ab Small Cap | Western Asset vs. Commonwealth Global Fund | Western Asset vs. Growth Strategy Fund | Western Asset vs. T Rowe Price |
| Pimco Low vs. Columbia Real Estate | Pimco Low vs. Columbia Real Estate | Pimco Low vs. Great West Real Estate | Pimco Low vs. Goldman Sachs Real |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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