Correlation Between Pimco Dynamic and Pcm Fund

Can any of the company-specific risk be diversified away by investing in both Pimco Dynamic 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 Dynamic 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 Dynamic Income and Pcm Fund, you can compare the effects of market volatilities on Pimco Dynamic 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 Dynamic with a short position of Pcm Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco Dynamic and Pcm Fund.

Diversification Opportunities for Pimco Dynamic and Pcm Fund

0.17

Correlation Coefficient

Pimco Dynamic  Pcm Fund

Average diversification

The 3 months correlation between Pimco and Pcm is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Dynamic 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 Dynamic 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 Dynamic 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 Dynamic i.e., Pimco Dynamic and Pcm Fund go up and down completely randomly.

Pair Corralation between Pimco Dynamic and Pcm Fund

Considering the 90-day investment horizon Pimco Dynamic Income is expected to generate 0.72 times more return on investment than Pcm Fund. However, Pimco Dynamic Income is 1.38 times less risky than Pcm Fund. It trades about 0.05 of its potential returns per unit of risk. Pcm Fund is currently generating about 0.03 per unit of risk. If you would invest  1,120  in Pimco Dynamic Income on August 30, 2024 and sell it today you would earn a total of  235.00  from holding Pimco Dynamic Income or generate 20.98% return on investment over 90 days.

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

Pimco Dynamic Income  vs.  Pcm Fund

Pimco Dynamic Income

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Pimco Dynamic Income are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy fundamental indicators, Pimco Dynamic is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pcm Fund

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Pcm Fund are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of very unfluctuating fundamental indicators, Pcm Fund may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with Pimco Dynamic and Pcm Fund

The main advantage of trading using opposite Pimco Dynamic and Pcm Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco Dynamic 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 Dynamic 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.