Correlation Between Pimco Income and Voya Securitized

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

Diversification Opportunities for Pimco Income and Voya Securitized

0.58

Correlation Coefficient

Pimco Income  Voya Securitized

Very weak diversification

The 3 months correlation between Pimco and Voya is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Income Fund and Voya Securitized Credit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Securitized Credit 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 Voya Securitized. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Securitized Credit has no effect on the direction of Pimco Income i.e., Pimco Income and Voya Securitized go up and down completely randomly.

Pair Corralation between Pimco Income and Voya Securitized

Assuming the 90 days horizon Pimco Income Fund is expected to under-perform the Voya Securitized. In addition to that, Pimco Income is 1.18 times more volatile than Voya Securitized Credit. It trades about -0.1 of its total potential returns per unit of risk. Voya Securitized Credit is currently generating about 0.02 per unit of volatility. If you would invest  944.00  in Voya Securitized Credit on October 7, 2024 and sell it today you would earn a total of  2.00  from holding Voya Securitized Credit or generate 0.21% return on investment over 90 days.

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

Pimco Income Fund  vs.  Voya Securitized Credit

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.

Voya Securitized Credit

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Voya Securitized Credit are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Voya Securitized 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 Voya Securitized

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

The idea behind Pimco Income Fund and Voya Securitized Credit 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.