Correlation Between Pimco Dynamic and Investor

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

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

Diversification Opportunities for Pimco Dynamic and Investor

0.35

Correlation Coefficient

Pimco Dynamic  Investor

Weak diversification

The 3 months correlation between Pimco and Investor is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Dynamic Income and Investor AB ser in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Investor AB ser and Pimco Dynamic 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 Dynamic Income are associated (or correlated) with Investor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Investor AB ser has no effect on the direction of Pimco Dynamic i.e., Pimco Dynamic and Investor go up and down completely randomly.

Pair Corralation between Pimco Dynamic and Investor

Considering the 90-day investment horizon Pimco Dynamic Income is expected to generate 0.29 times more return on investment than Investor. However, Pimco Dynamic Income is 3.5 times less risky than Investor. It trades about -0.03 of its potential returns per unit of risk. Investor AB ser is currently generating about -0.04 per unit of risk. If you would invest  1,925  in Pimco Dynamic Income on September 4, 2024 and sell it today you would lose (7.00) from holding Pimco Dynamic Income or give up 0.36% of portfolio value over 90 days.

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

Pimco Dynamic Income  vs.  Investor AB ser

Pimco Dynamic Income

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Pimco Dynamic Income are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. Despite fairly strong fundamental indicators, Pimco Dynamic is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Investor AB ser

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Investor AB ser has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental drivers, Investor is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Pimco Dynamic and Investor

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

The idea behind Pimco Dynamic Income and Investor AB ser 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.

Check out your portfolio center.

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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.