Correlation Between Pimco Dynamic and Defiance Daily

Can any of the company-specific risk be diversified away by investing in both Pimco Dynamic and Defiance Daily 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 Dynamic and Defiance Daily into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Pimco Dynamic Income and Defiance Daily Target, you can compare the effects of market volatilities on Pimco Dynamic and Defiance Daily 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 Dynamic with a short position of Defiance Daily. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco Dynamic and Defiance Daily.

Diversification Opportunities for Pimco Dynamic and Defiance Daily

0.34

Correlation Coefficient

Pimco Dynamic  Defiance Daily

Weak diversification

The 3 months correlation between Pimco and Defiance is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Dynamic Income and Defiance Daily Target in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Defiance Daily Target and Pimco Dynamic 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 Dynamic Income are associated (or correlated) with Defiance Daily. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Defiance Daily Target has no effect on the direction of Pimco Dynamic i.e., Pimco Dynamic and Defiance Daily go up and down completely randomly.

Pair Corralation between Pimco Dynamic and Defiance Daily

Considering the 90-day investment horizon Pimco Dynamic Income is expected to under-perform the Defiance Daily. But the fund apears to be less risky and, when comparing its historical volatility, Pimco Dynamic Income is 14.24 times less risky than Defiance Daily. The fund trades about -0.02 of its potential returns per unit of risk. The Defiance Daily Target is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  2,208  in Defiance Daily Target on July 30, 2025 and sell it today you would earn a total of  3,039  from holding Defiance Daily Target or generate 137.64% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Pimco Dynamic Income  vs.  Defiance Daily Target

Pimco Dynamic Income

Risk-Adjusted Performance

Weakest

Over the last 90 days Pimco Dynamic Income has generated negative risk-adjusted returns adding no value to fund investors. Despite fairly strong fundamental indicators, Pimco Dynamic is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Defiance Daily Target

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Defiance Daily Target are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Defiance Daily showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Pimco Dynamic and Defiance Daily

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

The idea behind Pimco Dynamic Income and Defiance Daily Target 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 Transaction History module to view history of all your transactions and understand their impact on performance.