Correlation Between Strategic Income and Pimco Income
Can any of the company-specific risk be diversified away by investing in both Strategic Income 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 Strategic Income and Pimco Income into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Strategic Income Opportunities and Pimco Income Fund, you can compare the effects of market volatilities on Strategic Income 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 Strategic Income with a short position of Pimco Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Strategic Income and Pimco Income.
Diversification Opportunities for Strategic Income and Pimco Income
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Strategic and Pimco is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Strategic Income Opportunities and Pimco Income Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco Me Fund and Strategic Income 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 Strategic Income Opportunities 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 Me Fund has no effect on the direction of Strategic Income i.e., Strategic Income and Pimco Income go up and down completely randomly.
Pair Corralation between Strategic Income and Pimco Income
Assuming the 90 days horizon Strategic Income is expected to generate 2.9 times less return on investment than Pimco Income. But when comparing it to its historical volatility, Strategic Income Opportunities is 1.15 times less risky than Pimco Income. It trades about 0.03 of its potential returns per unit of risk. Pimco Income Fund is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 996.00 in Pimco Income Fund on January 23, 2024 and sell it today you would earn a total of 44.00 from holding Pimco Income Fund or generate 4.42% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Strategic Income Opportunities vs. Pimco Income Fund
Performance |
Timeline |
Strategic Me Opportu |
Pimco Me Fund |
Strategic Income and Pimco Income Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Strategic Income and Pimco Income
The main advantage of trading using opposite Strategic Income and Pimco Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Strategic Income 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.Strategic Income vs. Regional Bank Fund | Strategic Income vs. Regional Bank Fund | Strategic Income vs. Multimanager Lifestyle Moderate | Strategic Income vs. Multimanager Lifestyle Balanced |
Pimco Income vs. Pimco Rae Worldwide | Pimco Income vs. Pimco Rae Worldwide | Pimco Income vs. Pimco Rae Worldwide | Pimco Income vs. Pimco Rae Worldwide |
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 Investment Finder module to use AI to screen and filter profitable investment opportunities.
Other Complementary Tools
Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes |