Correlation Between Pimco Income and Stocksplus Total

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

Diversification Opportunities for Pimco Income and Stocksplus Total

-0.39

Correlation Coefficient

Pimco Income  Stocksplus Total

Very good diversification

The 3 months correlation between Pimco and Stocksplus is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Income Fund and Stocksplus Total Return in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stocksplus Total Return 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 Stocksplus Total. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stocksplus Total Return has no effect on the direction of Pimco Income i.e., Pimco Income and Stocksplus Total go up and down completely randomly.

Pair Corralation between Pimco Income and Stocksplus Total

Assuming the 90 days horizon Pimco Income Fund is expected to generate 0.18 times more return on investment than Stocksplus Total. However, Pimco Income Fund is 5.68 times less risky than Stocksplus Total. It trades about 0.12 of its potential returns per unit of risk. Stocksplus Total Return is currently generating about -0.07 per unit of risk. If you would invest  1,055  in Pimco Income Fund on September 16, 2024 and sell it today you would earn a total of  5.00  from holding Pimco Income Fund or generate 0.47% return on investment over 90 days.

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

Pimco Income Fund  vs.  Stocksplus Total Return

Pimco Income

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pimco Income Fund has generated negative risk-adjusted returns adding no value to fund investors. 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.

Stocksplus Total Return

Risk-Adjusted Performance

3 of 100

Insignificant

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

Pair Trading with Pimco Income and Stocksplus Total

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

The idea behind Pimco Income Fund and Stocksplus Total Return 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.