Correlation Between Pimco Corporate and Pimco Strategic

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

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

Diversification Opportunities for Pimco Corporate and Pimco Strategic

-0.42

Correlation Coefficient

Pimco Corporate  Pimco Strategic

Very good diversification

The 3 months correlation between Pimco and Pimco is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Corporate Income and Pimco Strategic Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco Strategic Income and Pimco Corporate 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 Corporate Income are associated (or correlated) with Pimco Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco Strategic Income has no effect on the direction of Pimco Corporate i.e., Pimco Corporate and Pimco Strategic go up and down completely randomly.

Pair Corralation between Pimco Corporate and Pimco Strategic

Considering the 90-day investment horizon Pimco Corporate is expected to generate 1.02 times less return on investment than Pimco Strategic. But when comparing it to its historical volatility, Pimco Corporate Income is 2.17 times less risky than Pimco Strategic. It trades about 0.1 of its potential returns per unit of risk. Pimco Strategic Income is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  454.00  in Pimco Strategic Income on December 1, 2024 and sell it today you would earn a total of  165.00  from holding Pimco Strategic Income or generate 36.34% return on investment over 90 days.

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

Pimco Corporate Income  vs.  Pimco Strategic Income

Pimco Corporate Income

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Pimco Corporate Income are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Pimco Corporate is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pimco Strategic Income

Risk-Adjusted Performance

Very Weak

Over the last 90 days Pimco Strategic Income has generated negative risk-adjusted returns adding no value to fund investors. In spite of unfluctuating performance in the last few months, the Fund's fundamental indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the fund private investors.

Pair Trading with Pimco Corporate and Pimco Strategic

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

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