Correlation Between Western Asset and Pimco Diversified
Can any of the company-specific risk be diversified away by investing in both Western Asset and Pimco Diversified 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 Diversified 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 Diversified Income, you can compare the effects of market volatilities on Western Asset and Pimco Diversified 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 Diversified. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Pimco Diversified.
Diversification Opportunities for Western Asset and Pimco Diversified
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Western and Pimco is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Diversified and Pimco Diversified Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco Diversified 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 Diversified. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco Diversified Income has no effect on the direction of Western Asset i.e., Western Asset and Pimco Diversified go up and down completely randomly.
Pair Corralation between Western Asset and Pimco Diversified
Assuming the 90 days horizon Western Asset Diversified is expected to under-perform the Pimco Diversified. In addition to that, Western Asset is 1.47 times more volatile than Pimco Diversified Income. It trades about -0.03 of its total potential returns per unit of risk. Pimco Diversified Income is currently generating about 0.11 per unit of volatility. If you would invest 965.00 in Pimco Diversified Income on August 28, 2024 and sell it today you would earn a total of 4.00 from holding Pimco Diversified Income or generate 0.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Asset Diversified vs. Pimco Diversified Income
Performance |
| Timeline |
| Western Asset Diversified |
| Pimco Diversified Income |
Western Asset and Pimco Diversified Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Pimco Diversified
The main advantage of trading using opposite Western Asset and Pimco Diversified positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, Pimco Diversified 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 Diversified will offset losses from the drop in Pimco Diversified's long position.| Western Asset vs. Vanguard Total Stock | Western Asset vs. Vanguard 500 Index | Western Asset vs. Vanguard Total Stock | Western Asset vs. Vanguard Total Stock |
| Pimco Diversified vs. Lord Abbett High | Pimco Diversified vs. Pioneer High Yield | Pimco Diversified vs. Pace High Yield | Pimco Diversified vs. Multi Manager High Yield |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
Other Complementary Tools
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Stocks Directory Find actively traded stocks across global markets | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges |