Correlation Between Pimco Strategic and Pcm Fund

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

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

Diversification Opportunities for Pimco Strategic and Pcm Fund

0.95

Correlation Coefficient

Pimco Strategic  Pcm Fund

Almost no diversification

The 3 months correlation between Pimco and Pcm is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Strategic Income and Pcm Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pcm Fund and Pimco Strategic 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 Strategic Income are associated (or correlated) with Pcm Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pcm Fund has no effect on the direction of Pimco Strategic i.e., Pimco Strategic and Pcm Fund go up and down completely randomly.

Pair Corralation between Pimco Strategic and Pcm Fund

Considering the 90-day investment horizon Pimco Strategic Income is expected to generate 1.79 times more return on investment than Pcm Fund. However, Pimco Strategic is 1.79 times more volatile than Pcm Fund. It trades about -0.06 of its potential returns per unit of risk. Pcm Fund is currently generating about -0.1 per unit of risk. If you would invest  730.00  in Pimco Strategic Income on December 26, 2024 and sell it today you would lose (108.00) from holding Pimco Strategic Income or give up 14.79% of portfolio value over 90 days.

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

Pimco Strategic Income  vs.  Pcm Fund

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 latest unfluctuating performance, the Fund's fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the fund private investors.

Pcm Fund

Risk-Adjusted Performance

Very Weak

Over the last 90 days Pcm Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of conflicting performance in the last few months, the Fund's fundamental indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the fund investors.

Pair Trading with Pimco Strategic and Pcm Fund

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

The idea behind Pimco Strategic Income and Pcm 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.