Correlation Between XAI Octagon and Pimco Dynamic
Can any of the company-specific risk be diversified away by investing in both XAI Octagon and Pimco Dynamic 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 XAI Octagon and Pimco Dynamic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between XAI Octagon Floating and Pimco Dynamic Income, you can compare the effects of market volatilities on XAI Octagon and Pimco Dynamic 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 XAI Octagon with a short position of Pimco Dynamic. Check out your portfolio center. Please also check ongoing floating volatility patterns of XAI Octagon and Pimco Dynamic.
Diversification Opportunities for XAI Octagon and Pimco Dynamic
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between XAI and Pimco is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding XAI Octagon Floating and Pimco Dynamic Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco Dynamic Income and XAI Octagon 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 XAI Octagon Floating are associated (or correlated) with Pimco Dynamic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco Dynamic Income has no effect on the direction of XAI Octagon i.e., XAI Octagon and Pimco Dynamic go up and down completely randomly.
Pair Corralation between XAI Octagon and Pimco Dynamic
Given the investment horizon of 90 days XAI Octagon is expected to generate 1.31 times less return on investment than Pimco Dynamic. But when comparing it to its historical volatility, XAI Octagon Floating is 1.14 times less risky than Pimco Dynamic. It trades about 0.11 of its potential returns per unit of risk. Pimco Dynamic Income is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 1,255 in Pimco Dynamic Income on August 29, 2024 and sell it today you would earn a total of 108.00 from holding Pimco Dynamic Income or generate 8.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
XAI Octagon Floating vs. Pimco Dynamic Income
Performance |
| Timeline |
| XAI Octagon Floating |
| Pimco Dynamic Income |
XAI Octagon and Pimco Dynamic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with XAI Octagon and Pimco Dynamic
The main advantage of trading using opposite XAI Octagon and Pimco Dynamic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if XAI Octagon position performs unexpectedly, Pimco Dynamic 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 Dynamic will offset losses from the drop in Pimco Dynamic's long position.| XAI Octagon vs. Invesco High Income | XAI Octagon vs. Blackrock Muniholdings Ny | XAI Octagon vs. Nuveen California Select | XAI Octagon vs. MFS Investment Grade |
| Pimco Dynamic vs. Pimco Income Strategy | Pimco Dynamic vs. MainStay CBRE Global | Pimco Dynamic vs. XAI Octagon Floating | Pimco Dynamic vs. Pimco Corporate Income |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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