Correlation Between Pimco Income and Ladenburg Growth

Can any of the company-specific risk be diversified away by investing in both Pimco Income and Ladenburg Growth 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 Ladenburg Growth 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 Ladenburg Growth, you can compare the effects of market volatilities on Pimco Income and Ladenburg Growth 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 Ladenburg Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco Income and Ladenburg Growth.

Diversification Opportunities for Pimco Income and Ladenburg Growth

-0.54

Correlation Coefficient

Pimco Income  Ladenburg Growth

Excellent diversification

The 3 months correlation between Pimco and Ladenburg is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Income Strategy and Ladenburg Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ladenburg Growth 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 Ladenburg Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ladenburg Growth has no effect on the direction of Pimco Income i.e., Pimco Income and Ladenburg Growth go up and down completely randomly.

Pair Corralation between Pimco Income and Ladenburg Growth

Considering the 90-day investment horizon Pimco Income Strategy is expected to generate 0.24 times more return on investment than Ladenburg Growth. However, Pimco Income Strategy is 4.24 times less risky than Ladenburg Growth. It trades about 0.19 of its potential returns per unit of risk. Ladenburg Growth is currently generating about -0.14 per unit of risk. If you would invest  730.00  in Pimco Income Strategy on December 1, 2024 and sell it today you would earn a total of  28.00  from holding Pimco Income Strategy or generate 3.84% return on investment over 90 days.

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

Pimco Income Strategy  vs.  Ladenburg Growth

Pimco Income Strategy

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Pimco Income Strategy are ranked lower than 14 (%) 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.

Ladenburg Growth

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ladenburg Growth has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's forward indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Pimco Income and Ladenburg Growth

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

The idea behind Pimco Income Strategy and Ladenburg Growth 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.