Correlation Between Pimco Corporate and BlackRock
Can any of the company-specific risk be diversified away by investing in both Pimco Corporate and BlackRock 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 Pimco Corporate and BlackRock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pimco Corporate Income and BlackRock, you can compare the effects of market volatilities on Pimco Corporate and BlackRock 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 Pimco Corporate with a short position of BlackRock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco Corporate and BlackRock.
Diversification Opportunities for Pimco Corporate and BlackRock
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Pimco and BlackRock is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Corporate Income and BlackRock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BlackRock and Pimco Corporate 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 Pimco Corporate Income are associated (or correlated) with BlackRock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BlackRock has no effect on the direction of Pimco Corporate i.e., Pimco Corporate and BlackRock go up and down completely randomly.
Pair Corralation between Pimco Corporate and BlackRock
Considering the 90-day investment horizon Pimco Corporate is expected to generate 1.14 times less return on investment than BlackRock. But when comparing it to its historical volatility, Pimco Corporate Income is 1.47 times less risky than BlackRock. It trades about 0.06 of its potential returns per unit of risk. BlackRock is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 55,448 in BlackRock on February 7, 2024 and sell it today you would earn a total of 22,016 from holding BlackRock or generate 39.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pimco Corporate Income vs. BlackRock
Performance |
| Timeline |
| Pimco Corporate Income |
| BlackRock |
Pimco Corporate and BlackRock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pimco Corporate and BlackRock
The main advantage of trading using opposite Pimco Corporate and BlackRock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco Corporate position performs unexpectedly, BlackRock 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 BlackRock will offset losses from the drop in BlackRock's long position.| Pimco Corporate vs. Pimco Dynamic Income | Pimco Corporate vs. Guggenheim Strategic Opportunities | Pimco Corporate vs. Brookfield Real Assets | Pimco Corporate vs. Reaves Utility If |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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