Correlation Between Pcm Fund and Pimco Strategic

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

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

Diversification Opportunities for Pcm Fund and Pimco Strategic

0.95

Correlation Coefficient

Pcm Fund  Pimco Strategic

Almost no diversification

The 3 months correlation between Pcm and Pimco is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Pcm Fund and Pimco Strategic Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco Strategic Income and Pcm Fund 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 Pcm Fund are associated (or correlated) with Pimco Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco Strategic Income has no effect on the direction of Pcm Fund i.e., Pcm Fund and Pimco Strategic go up and down completely randomly.

Pair Corralation between Pcm Fund and Pimco Strategic

Considering the 90-day investment horizon Pcm Fund is expected to under-perform the Pimco Strategic. But the fund apears to be less risky and, when comparing its historical volatility, Pcm Fund is 1.79 times less risky than Pimco Strategic. The fund trades about -0.1 of its potential returns per unit of risk. The Pimco Strategic Income is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest  730.00  in Pimco Strategic Income on December 26, 2024 and sell it today you would lose (108.00) from holding Pimco Strategic Income or give up 14.79% of portfolio value over 90 days.

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

Pcm Fund  vs.  Pimco Strategic Income

Pcm Fund

Risk-Adjusted Performance

Very Weak

Over the last 90 days Pcm Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of conflicting performance in the last few months, the Fund's fundamental indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the fund investors.

Pimco Strategic Income

Risk-Adjusted Performance

Very Weak

Over the last 90 days Pimco Strategic Income has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest unfluctuating performance, the Fund's fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the fund private investors.

Pair Trading with Pcm Fund and Pimco Strategic

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

The idea behind Pcm Fund and Pimco Strategic 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.