Correlation Between Pimco Income and Floating Rate
Can any of the company-specific risk be diversified away by investing in both Pimco Income and Floating Rate 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 Income and Floating Rate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pimco Income Strategy and Floating Rate Fund, you can compare the effects of market volatilities on Pimco Income and Floating Rate 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 Income with a short position of Floating Rate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco Income and Floating Rate.
Diversification Opportunities for Pimco Income and Floating Rate
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Pimco and Floating is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Income Strategy and Floating Rate Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Floating Rate and Pimco Income 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 Income Strategy are associated (or correlated) with Floating Rate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Floating Rate has no effect on the direction of Pimco Income i.e., Pimco Income and Floating Rate go up and down completely randomly.
Pair Corralation between Pimco Income and Floating Rate
Considering the 90-day investment horizon Pimco Income Strategy is expected to generate 3.17 times more return on investment than Floating Rate. However, Pimco Income is 3.17 times more volatile than Floating Rate Fund. It trades about 0.3 of its potential returns per unit of risk. Floating Rate Fund is currently generating about 0.18 per unit of risk. If you would invest 714.00 in Pimco Income Strategy on June 11, 2025 and sell it today you would earn a total of 52.00 from holding Pimco Income Strategy or generate 7.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pimco Income Strategy vs. Floating Rate Fund
Performance |
| Timeline |
| Pimco Income Strategy |
| Floating Rate |
Pimco Income and Floating Rate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pimco Income and Floating Rate
The main advantage of trading using opposite Pimco Income and Floating Rate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco Income position performs unexpectedly, Floating Rate 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 Floating Rate will offset losses from the drop in Floating Rate's long position.| Pimco Income vs. Pimco Corporate Income | Pimco Income vs. BlackRock Credit Allocation | Pimco Income vs. Pimco Income Strategy | Pimco Income vs. Pimco High Income |
| Floating Rate vs. L Abbett Growth | Floating Rate vs. Semiconductor Ultrasector Profund | Floating Rate vs. T Rowe Price | Floating Rate vs. Principal Lifetime Hybrid |
Check out your portfolio center.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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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