Correlation Between Cornerstone Strategic and PIMCO Access

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

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

Diversification Opportunities for Cornerstone Strategic and PIMCO Access

0.44

Correlation Coefficient

Cornerstone Strategic  PIMCO Access

Very weak diversification

The 3 months correlation between Cornerstone and PIMCO is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Cornerstone Strategic Value and PIMCO Access Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PIMCO Access Income and Cornerstone Strategic 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 Cornerstone Strategic Value are associated (or correlated) with PIMCO Access. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PIMCO Access Income has no effect on the direction of Cornerstone Strategic i.e., Cornerstone Strategic and PIMCO Access go up and down completely randomly.

Pair Corralation between Cornerstone Strategic and PIMCO Access

Considering the 90-day investment horizon Cornerstone Strategic Value is expected to under-perform the PIMCO Access. In addition to that, Cornerstone Strategic is 2.67 times more volatile than PIMCO Access Income. It trades about -0.08 of its total potential returns per unit of risk. PIMCO Access Income is currently generating about -0.02 per unit of volatility. If you would invest  1,640  in PIMCO Access Income on December 1, 2024 and sell it today you would lose (19.00) from holding PIMCO Access Income or give up 1.16% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Cornerstone Strategic Value  vs.  PIMCO Access Income

Cornerstone Strategic

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cornerstone Strategic Value has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's essential indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the fund investors.

PIMCO Access Income

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Cornerstone Strategic and PIMCO Access

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

The idea behind Cornerstone Strategic Value and PIMCO Access 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.