Correlation Between Pimco Corporate and Abrdn Emerging

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

Diversification Opportunities for Pimco Corporate and Abrdn Emerging

0.62

Correlation Coefficient

Pimco Corporate  Abrdn Emerging

Poor diversification

The 3 months correlation between Pimco and Abrdn is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Corporate Income and Abrdn Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Abrdn Emerging Markets 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 Abrdn Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Abrdn Emerging Markets has no effect on the direction of Pimco Corporate i.e., Pimco Corporate and Abrdn Emerging go up and down completely randomly.

Pair Corralation between Pimco Corporate and Abrdn Emerging

Considering the 90-day investment horizon Pimco Corporate is expected to generate 10.89 times less return on investment than Abrdn Emerging. But when comparing it to its historical volatility, Pimco Corporate Income is 2.95 times less risky than Abrdn Emerging. It trades about 0.05 of its potential returns per unit of risk. Abrdn Emerging Markets is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  530.00  in Abrdn Emerging Markets on May 6, 2025 and sell it today you would earn a total of  74.00  from holding Abrdn Emerging Markets or generate 13.96% return on investment over 90 days.

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

Pimco Corporate Income  vs.  Abrdn Emerging Markets

Pimco Corporate Income

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Pimco Corporate Income are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of very healthy fundamental indicators, Pimco Corporate is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Abrdn Emerging Markets

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Abrdn Emerging Markets are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. Despite nearly unsteady technical and fundamental indicators, Abrdn Emerging reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Pimco Corporate and Abrdn Emerging

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

The idea behind Pimco Corporate Income and Abrdn Emerging Markets 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.