Correlation Between Prudential High and Pimco Incme
Can any of the company-specific risk be diversified away by investing in both Prudential High and Pimco Incme 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 Prudential High and Pimco Incme into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Prudential High Yield and Pimco Incme Fund, you can compare the effects of market volatilities on Prudential High and Pimco Incme 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 Prudential High with a short position of Pimco Incme. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prudential High and Pimco Incme.
Diversification Opportunities for Prudential High and Pimco Incme
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Prudential and Pimco is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Prudential High Yield and Pimco Incme Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco Incme Fund and Prudential High 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 Prudential High Yield are associated (or correlated) with Pimco Incme. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco Incme Fund has no effect on the direction of Prudential High i.e., Prudential High and Pimco Incme go up and down completely randomly.
Pair Corralation between Prudential High and Pimco Incme
Assuming the 90 days horizon Prudential High is expected to generate 1.12 times less return on investment than Pimco Incme. But when comparing it to its historical volatility, Prudential High Yield is 1.37 times less risky than Pimco Incme. It trades about 0.31 of its potential returns per unit of risk. Pimco Incme Fund is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 1,042 in Pimco Incme Fund on June 6, 2025 and sell it today you would earn a total of 42.00 from holding Pimco Incme Fund or generate 4.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Prudential High Yield vs. Pimco Incme Fund
Performance |
| Timeline |
| Prudential High Yield |
| Pimco Incme Fund |
Prudential High and Pimco Incme Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prudential High and Pimco Incme
The main advantage of trading using opposite Prudential High and Pimco Incme positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prudential High position performs unexpectedly, Pimco Incme 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 Incme will offset losses from the drop in Pimco Incme's long position.| Prudential High vs. Prudential Total Return | Prudential High vs. Metropolitan West Total | Prudential High vs. John Hancock Disciplined | Prudential High vs. Europacific Growth Fund |
| Pimco Incme vs. Pimco Rae Worldwide | Pimco Incme vs. Pimco Rae Worldwide | Pimco Incme vs. Pimco Rae Worldwide | Pimco Incme vs. Pimco Rae Worldwide |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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