Correlation Between Core Plus and Pimco Income
Can any of the company-specific risk be diversified away by investing in both Core Plus 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 Core Plus and Pimco Income into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Core Plus Income and Pimco Income Fund, you can compare the effects of market volatilities on Core Plus 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 Core Plus with a short position of Pimco Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Core Plus and Pimco Income.
Diversification Opportunities for Core Plus and Pimco Income
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Core and Pimco is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Core Plus 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 Core Plus 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 Core Plus 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 Core Plus i.e., Core Plus and Pimco Income go up and down completely randomly.
Pair Corralation between Core Plus and Pimco Income
Assuming the 90 days horizon Core Plus is expected to generate 1.19 times less return on investment than Pimco Income. In addition to that, Core Plus is 1.24 times more volatile than Pimco Income Fund. It trades about 0.07 of its total potential returns per unit of risk. Pimco Income Fund is currently generating about 0.1 per unit of volatility. If you would invest 1,016 in Pimco Income Fund on September 1, 2024 and sell it today you would earn a total of 50.00 from holding Pimco Income Fund or generate 4.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Core Plus Income vs. Pimco Income Fund
Performance |
| Timeline |
| Core Plus Income |
| Pimco Income |
Core Plus and Pimco Income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Core Plus and Pimco Income
The main advantage of trading using opposite Core Plus and Pimco Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Core Plus 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.| Core Plus vs. Artisan High Income | Core Plus vs. T Rowe Price | Core Plus vs. Dodge Global Bond | Core Plus vs. Performance Trust Strategic |
| Pimco Income vs. Fidelity Real Estate | Pimco Income vs. Guggenheim Risk Managed | Pimco Income vs. Commonwealth Real Estate | Pimco Income vs. Msif Real Estate |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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