Correlation Between PIMCO Canadian and PIMCO Monthly

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

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

Diversification Opportunities for PIMCO Canadian and PIMCO Monthly

0.33

Correlation Coefficient

PIMCO Canadian  PIMCO Monthly

Weak diversification

The 3 months correlation between PIMCO and PIMCO is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding PIMCO Canadian Core and PIMCO Monthly Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PIMCO Monthly Income and PIMCO Canadian 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 Canadian Core are associated (or correlated) with PIMCO Monthly. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PIMCO Monthly Income has no effect on the direction of PIMCO Canadian i.e., PIMCO Canadian and PIMCO Monthly go up and down completely randomly.

Pair Corralation between PIMCO Canadian and PIMCO Monthly

Assuming the 90 days trading horizon PIMCO Canadian Core is expected to generate 0.97 times more return on investment than PIMCO Monthly. However, PIMCO Canadian Core is 1.03 times less risky than PIMCO Monthly. It trades about 0.06 of its potential returns per unit of risk. PIMCO Monthly Income is currently generating about -0.12 per unit of risk. If you would invest  2,007  in PIMCO Canadian Core on September 25, 2024 and sell it today you would earn a total of  10.00  from holding PIMCO Canadian Core or generate 0.5% return on investment over 90 days.

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

PIMCO Canadian Core  vs.  PIMCO Monthly Income

PIMCO Canadian Core

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PIMCO Canadian Core has generated negative risk-adjusted returns adding no value to fund investors. In spite of very healthy basic indicators, PIMCO Canadian is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

PIMCO Monthly Income

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PIMCO Monthly Income has generated negative risk-adjusted returns adding no value to fund investors. In spite of comparatively stable basic indicators, PIMCO Monthly is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with PIMCO Canadian and PIMCO Monthly

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

The idea behind PIMCO Canadian Core and PIMCO Monthly 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 CEOs Directory module to screen CEOs from public companies around the world.