Correlation Between Pimco Short and Short Term

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

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

Diversification Opportunities for Pimco Short and Short Term

0.07

Correlation Coefficient

Pimco Short  Short Term

Significant diversification

The 3 months correlation between Pimco and Short is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Short Asset and Short Term Income Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Short Term Income and Pimco Short 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 Short Asset are associated (or correlated) with Short Term. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Short Term Income has no effect on the direction of Pimco Short i.e., Pimco Short and Short Term go up and down completely randomly.

Pair Corralation between Pimco Short and Short Term

Assuming the 90 days horizon Pimco Short Asset is expected to generate 0.78 times more return on investment than Short Term. However, Pimco Short Asset is 1.28 times less risky than Short Term. It trades about 0.21 of its potential returns per unit of risk. Short Term Income Fund is currently generating about 0.15 per unit of risk. If you would invest  950.00  in Pimco Short Asset on October 7, 2024 and sell it today you would earn a total of  45.00  from holding Pimco Short Asset or generate 4.74% return on investment over 90 days.

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

Pimco Short Asset  vs.  Short Term Income Fund

Pimco Short Asset

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Pimco Short Asset are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Pimco Short is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Short Term Income

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Short Term Income Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Short Term 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 Short and Short Term

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

The idea behind Pimco Short Asset and Short Term Income Fund 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..