Correlation Between Pimco Income and Aegis Value

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

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

Diversification Opportunities for Pimco Income and Aegis Value

0.72

Correlation Coefficient

Pimco Income  Aegis Value

Poor diversification

The 3 months correlation between Pimco and Aegis is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Income Strategy and Aegis Value Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aegis Value Fund and Pimco Income 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 Income Strategy are associated (or correlated) with Aegis Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aegis Value Fund has no effect on the direction of Pimco Income i.e., Pimco Income and Aegis Value go up and down completely randomly.

Pair Corralation between Pimco Income and Aegis Value

Considering the 90-day investment horizon Pimco Income is expected to generate 3.31 times less return on investment than Aegis Value. But when comparing it to its historical volatility, Pimco Income Strategy is 4.92 times less risky than Aegis Value. It trades about 0.26 of its potential returns per unit of risk. Aegis Value Fund is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  3,555  in Aegis Value Fund on December 28, 2024 and sell it today you would earn a total of  529.00  from holding Aegis Value Fund or generate 14.88% return on investment over 90 days.

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

Pimco Income Strategy  vs.  Aegis Value Fund

Pimco Income Strategy

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Pimco Income Strategy are ranked lower than 20 (%) of all funds and portfolios of funds over the last 90 days. In spite of very healthy technical and fundamental indicators, Pimco Income is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Aegis Value Fund

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Aegis Value Fund are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak essential indicators, Aegis Value showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Pimco Income and Aegis Value

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

The idea behind Pimco Income Strategy and Aegis Value 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.