Correlation Between Pimco Incme and Pimco Income

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

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

Diversification Opportunities for Pimco Incme and Pimco Income

1.0

Correlation Coefficient

Pimco Incme  Pimco Income

No risk reduction

The 3 months correlation between Pimco and Pimco is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Incme Fund and Pimco Income Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco Income and Pimco Incme 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 Incme Fund are associated (or correlated) with Pimco Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco Income has no effect on the direction of Pimco Incme i.e., Pimco Incme and Pimco Income go up and down completely randomly.

Pair Corralation between Pimco Incme and Pimco Income

Assuming the 90 days horizon Pimco Incme is expected to generate 1.21 times less return on investment than Pimco Income. But when comparing it to its historical volatility, Pimco Incme Fund is 1.01 times less risky than Pimco Income. It trades about 0.03 of its potential returns per unit of risk. Pimco Income Fund is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  1,061  in Pimco Income Fund on August 31, 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 Together
Strength	Very Strong
Accuracy	98.44%
Values	Daily Returns

Pimco Incme Fund  vs.  Pimco Income Fund

Pimco Incme Fund

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Pimco Incme Fund are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Pimco Incme is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pimco Income

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Pimco Income Fund are ranked lower than 2 (%) 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.

Pair Trading with Pimco Incme and Pimco Income

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

The idea behind Pimco Incme Fund and Pimco Income 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.