Correlation Between Pimco Income and Pacific Funds

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

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

Diversification Opportunities for Pimco Income and Pacific Funds

0.93

Correlation Coefficient

Pimco Income  Pacific Funds

Almost no diversification

The 3 months correlation between Pimco and Pacific is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Income Strategy and Pacific Funds High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pacific Funds High and Pimco Income 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 Income Strategy are associated (or correlated) with Pacific Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pacific Funds High has no effect on the direction of Pimco Income i.e., Pimco Income and Pacific Funds go up and down completely randomly.

Pair Corralation between Pimco Income and Pacific Funds

Considering the 90-day investment horizon Pimco Income Strategy is expected to generate 2.31 times more return on investment than Pacific Funds. However, Pimco Income is 2.31 times more volatile than Pacific Funds High. It trades about 0.28 of its potential returns per unit of risk. Pacific Funds High is currently generating about 0.32 per unit of risk. If you would invest  705.00  in Pimco Income Strategy on May 6, 2025 and sell it today you would earn a total of  48.00  from holding Pimco Income Strategy or generate 6.81% return on investment over 90 days.

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

Pimco Income Strategy  vs.  Pacific Funds High

Pimco Income Strategy

Risk-Adjusted Performance

Solid

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

Pacific Funds High

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Pacific Funds High are ranked lower than 25 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Pacific Funds is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Pimco Income and Pacific Funds

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

The idea behind Pimco Income Strategy and Pacific Funds High 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .