Correlation Between Bloom Select and PIMCO Multi

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

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

Diversification Opportunities for Bloom Select and PIMCO Multi

0.32

Correlation Coefficient

Bloom Select  PIMCO Multi

Weak diversification

The 3 months correlation between Bloom and PIMCO is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Bloom Select Income and PIMCO Multi Sector Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PIMCO Multi Sector and Bloom Select 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 Bloom Select Income are associated (or correlated) with PIMCO Multi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PIMCO Multi Sector has no effect on the direction of Bloom Select i.e., Bloom Select and PIMCO Multi go up and down completely randomly.

Pair Corralation between Bloom Select and PIMCO Multi

Assuming the 90 days trading horizon Bloom Select Income is expected to generate 1.71 times more return on investment than PIMCO Multi. However, Bloom Select is 1.71 times more volatile than PIMCO Multi Sector Income. It trades about 0.01 of its potential returns per unit of risk. PIMCO Multi Sector Income is currently generating about -0.05 per unit of risk. If you would invest  804.00  in Bloom Select Income on September 14, 2024 and sell it today you would earn a total of  5.00  from holding Bloom Select Income or generate 0.62% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.24%
Values	Daily Returns

Bloom Select Income  vs.  PIMCO Multi Sector Income

Bloom Select Income

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Bloom Select Income are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat strong fundamental drivers, Bloom Select is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

PIMCO Multi Sector

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PIMCO Multi Sector Income has generated negative risk-adjusted returns adding no value to fund investors. Despite somewhat strong basic indicators, PIMCO Multi is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Bloom Select and PIMCO Multi

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

The idea behind Bloom Select Income and PIMCO Multi Sector 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.