Correlation Between Pimco Preferred and Pimco Emerging
Can any of the company-specific risk be diversified away by investing in both Pimco Preferred and Pimco Emerging 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 Preferred and Pimco Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pimco Preferred And and Pimco Emerging Markets, you can compare the effects of market volatilities on Pimco Preferred and Pimco Emerging 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 Preferred with a short position of Pimco Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco Preferred and Pimco Emerging.
Diversification Opportunities for Pimco Preferred and Pimco Emerging
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Pimco and Pimco is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Preferred And and Pimco Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco Emerging Markets and Pimco Preferred 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 Preferred And are associated (or correlated) with Pimco Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco Emerging Markets has no effect on the direction of Pimco Preferred i.e., Pimco Preferred and Pimco Emerging go up and down completely randomly.
Pair Corralation between Pimco Preferred and Pimco Emerging
Assuming the 90 days horizon Pimco Preferred is expected to generate 1.21 times less return on investment than Pimco Emerging. But when comparing it to its historical volatility, Pimco Preferred And is 2.46 times less risky than Pimco Emerging. It trades about 0.53 of its potential returns per unit of risk. Pimco Emerging Markets is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 613.00 in Pimco Emerging Markets on June 1, 2025 and sell it today you would earn a total of 27.00 from holding Pimco Emerging Markets or generate 4.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 98.44% |
| Values | Daily Returns |
Pimco Preferred And vs. Pimco Emerging Markets
Performance |
| Timeline |
| Pimco Preferred And |
| Pimco Emerging Markets |
Pimco Preferred and Pimco Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pimco Preferred and Pimco Emerging
The main advantage of trading using opposite Pimco Preferred and Pimco Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco Preferred position performs unexpectedly, Pimco Emerging 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 Emerging will offset losses from the drop in Pimco Emerging's long position.| Pimco Preferred vs. Multi Manager High Yield | Pimco Preferred vs. Msift High Yield | Pimco Preferred vs. Prudential High Yield | Pimco Preferred vs. Buffalo High Yield |
| Pimco Emerging vs. Mesirow Financial High | Pimco Emerging vs. Gmo High Yield | Pimco Emerging vs. Pioneer High Yield | Pimco Emerging vs. Virtus High Yield |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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