Correlation Between Pimco Dynamic and MITX

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

Diversification Opportunities for Pimco Dynamic and MITX

-0.23

Correlation Coefficient

Pimco Dynamic  MITX

Very good diversification

The 3 months correlation between Pimco and MITX is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Dynamic Income and MITX in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MITX 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 MITX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MITX has no effect on the direction of Pimco Dynamic i.e., Pimco Dynamic and MITX go up and down completely randomly.

Pair Corralation between Pimco Dynamic and MITX

Considering the 90-day investment horizon Pimco Dynamic is expected to generate 4.57 times less return on investment than MITX. But when comparing it to its historical volatility, Pimco Dynamic Income is 20.53 times less risky than MITX. It trades about 0.09 of its potential returns per unit of risk. MITX is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  0.02  in MITX on May 2, 2025 and sell it today you would lose  0.00  from holding MITX or give up 14.06% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.88%
Values	Daily Returns

Pimco Dynamic Income  vs.  MITX

Pimco Dynamic Income

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Pimco Dynamic Income are ranked lower than 6 (%) 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.

MITX

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in MITX are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, MITX may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Pimco Dynamic and MITX

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

The idea behind Pimco Dynamic Income and MITX 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.

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 Equity Valuation module to check real value of public entities based on technical and fundamental data.