Correlation Between Western Asset and PIMCO Access
Can any of the company-specific risk be diversified away by investing in both Western Asset and PIMCO Access 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 Access into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Asset Diversified and PIMCO Access Income, you can compare the effects of market volatilities on Western Asset and PIMCO Access 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 Access. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and PIMCO Access.
Diversification Opportunities for Western Asset and PIMCO Access
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Western and PIMCO is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Diversified and PIMCO Access Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PIMCO Access Income 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 Diversified are associated (or correlated) with PIMCO Access. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PIMCO Access Income has no effect on the direction of Western Asset i.e., Western Asset and PIMCO Access go up and down completely randomly.
Pair Corralation between Western Asset and PIMCO Access
Considering the 90-day investment horizon Western Asset Diversified is expected to generate 0.72 times more return on investment than PIMCO Access. However, Western Asset Diversified is 1.38 times less risky than PIMCO Access. It trades about 0.1 of its potential returns per unit of risk. PIMCO Access Income is currently generating about 0.06 per unit of risk. If you would invest 1,049 in Western Asset Diversified on August 28, 2024 and sell it today you would earn a total of 426.00 from holding Western Asset Diversified or generate 40.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Asset Diversified vs. PIMCO Access Income
Performance |
| Timeline |
| Western Asset Diversified |
| PIMCO Access Income |
Western Asset and PIMCO Access Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and PIMCO Access
The main advantage of trading using opposite Western Asset and PIMCO Access positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, PIMCO Access 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 Access will offset losses from the drop in PIMCO Access' long position.| Western Asset vs. Doubleline Yield Opportunities | Western Asset vs. PIMCO Access Income | Western Asset vs. Blackrock Innovation Growth | Western Asset vs. Cohen Steers Tax Advantaged |
| PIMCO Access vs. Pimco Dynamic Income | PIMCO Access vs. Pimco Corporate Income | PIMCO Access vs. Doubleline Yield Opportunities | PIMCO Access vs. Cohen Steers Reit |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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