Correlation Between Pimco Corporate and Cornerstone Strategic

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

Diversification Opportunities for Pimco Corporate and Cornerstone Strategic

0.93

Correlation Coefficient

Pimco Corporate  Cornerstone Strategic

Almost no diversification

The 3 months correlation between Pimco and Cornerstone is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Corporate Income and Cornerstone Strategic Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cornerstone Strategic 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 Cornerstone Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cornerstone Strategic has no effect on the direction of Pimco Corporate i.e., Pimco Corporate and Cornerstone Strategic go up and down completely randomly.

Pair Corralation between Pimco Corporate and Cornerstone Strategic

Considering the 90-day investment horizon Pimco Corporate is expected to generate 3.21 times less return on investment than Cornerstone Strategic. But when comparing it to its historical volatility, Pimco Corporate Income is 5.73 times less risky than Cornerstone Strategic. It trades about 0.33 of its potential returns per unit of risk. Cornerstone Strategic Value is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  730.00  in Cornerstone Strategic Value on September 13, 2024 and sell it today you would earn a total of  123.00  from holding Cornerstone Strategic Value or generate 16.85% return on investment over 90 days.

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

Pimco Corporate Income  vs.  Cornerstone Strategic Value

Pimco Corporate Income

Risk-Adjusted Performance

26 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Pimco Corporate Income are ranked lower than 26 (%) 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.

Cornerstone Strategic

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Cornerstone Strategic Value are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of very weak essential indicators, Cornerstone Strategic displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Pimco Corporate and Cornerstone Strategic

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

The idea behind Pimco Corporate Income and Cornerstone Strategic Value 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.