Correlation Between Pimco Income and Api Multi-asset

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

By analyzing existing cross correlation between Pimco Income Fund and Api Multi Asset Income, you can compare the effects of market volatilities on Pimco Income and Api Multi-asset 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 Api Multi-asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco Income and Api Multi-asset.

Diversification Opportunities for Pimco Income and Api Multi-asset

0.84

Correlation Coefficient

Pimco Income  Api Multi-asset

Very poor diversification

The 3 months correlation between Pimco and Api is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Income Fund and Api Multi Asset Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Api Multi Asset 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 Fund are associated (or correlated) with Api Multi-asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Api Multi Asset has no effect on the direction of Pimco Income i.e., Pimco Income and Api Multi-asset go up and down completely randomly.

Pair Corralation between Pimco Income and Api Multi-asset

Assuming the 90 days horizon Pimco Income Fund is expected to generate 1.4 times more return on investment than Api Multi-asset. However, Pimco Income is 1.4 times more volatile than Api Multi Asset Income. It trades about 0.13 of its potential returns per unit of risk. Api Multi Asset Income is currently generating about 0.11 per unit of risk. If you would invest  1,046  in Pimco Income Fund on October 23, 2024 and sell it today you would earn a total of  7.00  from holding Pimco Income Fund or generate 0.67% return on investment over 90 days.

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

Pimco Income Fund  vs.  Api Multi Asset Income

Pimco Income

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Pimco Income Fund are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Pimco Income is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Api Multi Asset

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Api Multi Asset Income has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Api Multi-asset is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Pimco Income and Api Multi-asset

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

The idea behind Pimco Income Fund and Api Multi Asset 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.