Correlation Between Pimco Dynamic and Gateway Equity

Can any of the company-specific risk be diversified away by investing in both Pimco Dynamic and Gateway Equity 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 Gateway Equity 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 Gateway Equity Call, you can compare the effects of market volatilities on Pimco Dynamic and Gateway Equity 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 Gateway Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco Dynamic and Gateway Equity.

Diversification Opportunities for Pimco Dynamic and Gateway Equity

0.85

Correlation Coefficient

Pimco Dynamic  Gateway Equity

Very poor diversification

The 3 months correlation between Pimco and Gateway is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Dynamic Income and Gateway Equity Call in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gateway Equity Call 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 Gateway Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gateway Equity Call has no effect on the direction of Pimco Dynamic i.e., Pimco Dynamic and Gateway Equity go up and down completely randomly.

Pair Corralation between Pimco Dynamic and Gateway Equity

Considering the 90-day investment horizon Pimco Dynamic is expected to generate 1.9 times less return on investment than Gateway Equity. But when comparing it to its historical volatility, Pimco Dynamic Income is 1.06 times less risky than Gateway Equity. It trades about 0.15 of its potential returns per unit of risk. Gateway Equity Call is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest  1,881  in Gateway Equity Call on May 3, 2025 and sell it today you would earn a total of  128.00  from holding Gateway Equity Call or generate 6.8% return on investment over 90 days.

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

Pimco Dynamic Income  vs.  Gateway Equity Call

Pimco Dynamic Income

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Pimco Dynamic Income are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy fundamental indicators, Pimco Dynamic is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Gateway Equity Call

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Gateway Equity Call are ranked lower than 21 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Gateway Equity may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Pimco Dynamic and Gateway Equity

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

The idea behind Pimco Dynamic Income and Gateway Equity Call 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.