Correlation Between PIMCO Monthly and PIMCO Tactical

Can any of the company-specific risk be diversified away by investing in both PIMCO Monthly and PIMCO Tactical 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 Monthly and PIMCO Tactical into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between PIMCO Monthly Income and PIMCO Tactical Income, you can compare the effects of market volatilities on PIMCO Monthly and PIMCO Tactical 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 Monthly with a short position of PIMCO Tactical. Check out your portfolio center. Please also check ongoing floating volatility patterns of PIMCO Monthly and PIMCO Tactical.

Diversification Opportunities for PIMCO Monthly and PIMCO Tactical

0.1

Correlation Coefficient

PIMCO Monthly  PIMCO Tactical

Average diversification

The 3 months correlation between PIMCO and PIMCO is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding PIMCO Monthly Income and PIMCO Tactical Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PIMCO Tactical Income and PIMCO Monthly 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 Monthly Income are associated (or correlated) with PIMCO Tactical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PIMCO Tactical Income has no effect on the direction of PIMCO Monthly i.e., PIMCO Monthly and PIMCO Tactical go up and down completely randomly.

Pair Corralation between PIMCO Monthly and PIMCO Tactical

Assuming the 90 days trading horizon PIMCO Monthly Income is expected to generate 0.31 times more return on investment than PIMCO Tactical. However, PIMCO Monthly Income is 3.21 times less risky than PIMCO Tactical. It trades about 0.3 of its potential returns per unit of risk. PIMCO Tactical Income is currently generating about 0.0 per unit of risk. If you would invest  1,255  in PIMCO Monthly Income on September 15, 2024 and sell it today you would earn a total of  12.00  from holding PIMCO Monthly Income or generate 0.96% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	91.3%
Values	Daily Returns

PIMCO Monthly Income  vs.  PIMCO Tactical Income

PIMCO Monthly Income

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PIMCO Monthly Income has generated negative risk-adjusted returns adding no value to fund investors. In spite of comparatively stable basic indicators, PIMCO Monthly is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

PIMCO Tactical Income

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in PIMCO Tactical Income are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat strong forward indicators, PIMCO Tactical is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with PIMCO Monthly and PIMCO Tactical

The main advantage of trading using opposite PIMCO Monthly and PIMCO Tactical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PIMCO Monthly position performs unexpectedly, PIMCO Tactical 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 Tactical will offset losses from the drop in PIMCO Tactical's long position.

The idea behind PIMCO Monthly Income and PIMCO Tactical Income pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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.