Correlation Between Barings Corporate and Pimco Corporate

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

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

Diversification Opportunities for Barings Corporate and Pimco Corporate

0.65

Correlation Coefficient

Barings Corporate  Pimco Corporate

Poor diversification

The 3 months correlation between Barings and Pimco is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Barings Corporate Investors and Pimco Corporate Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco Corporate Income and Barings 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 Barings Corporate Investors are associated (or correlated) with Pimco Corporate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco Corporate Income has no effect on the direction of Barings Corporate i.e., Barings Corporate and Pimco Corporate go up and down completely randomly.

Pair Corralation between Barings Corporate and Pimco Corporate

Considering the 90-day investment horizon Barings Corporate Investors is expected to generate 7.84 times more return on investment than Pimco Corporate. However, Barings Corporate is 7.84 times more volatile than Pimco Corporate Income. It trades about 0.08 of its potential returns per unit of risk. Pimco Corporate Income is currently generating about 0.21 per unit of risk. If you would invest  2,035  in Barings Corporate Investors on December 28, 2024 and sell it today you would earn a total of  194.00  from holding Barings Corporate Investors or generate 9.53% return on investment over 90 days.

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

Barings Corporate Investors  vs.  Pimco Corporate Income

Barings Corporate

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Barings Corporate Investors are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain fundamental indicators, Barings Corporate may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pimco Corporate Income

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Pimco Corporate Income are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Pimco Corporate is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Barings Corporate and Pimco Corporate

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

The idea behind Barings Corporate Investors and Pimco Corporate 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.