Correlation Between Pimco High and Pimco Dynamic

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

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

Diversification Opportunities for Pimco High and Pimco Dynamic

0.85

Correlation Coefficient

Pimco High  Pimco Dynamic

Very poor diversification

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

Pair Corralation between Pimco High and Pimco Dynamic

Considering the 90-day investment horizon Pimco High Income is expected to generate 0.93 times more return on investment than Pimco Dynamic. However, Pimco High Income is 1.07 times less risky than Pimco Dynamic. It trades about 0.26 of its potential returns per unit of risk. Pimco Dynamic Income is currently generating about 0.14 per unit of risk. If you would invest  462.00  in Pimco High Income on May 6, 2025 and sell it today you would earn a total of  27.00  from holding Pimco High Income or generate 5.84% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.41%
Values	Daily Returns

Pimco High Income  vs.  Pimco Dynamic Income

Pimco High Income

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Pimco High Income are ranked lower than 20 (%) of all funds and portfolios of funds over the last 90 days. Despite quite persistent technical indicators, Pimco High is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

Pimco Dynamic Income

Risk-Adjusted Performance

Good

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.

Pair Trading with Pimco High and Pimco Dynamic

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

The idea behind Pimco High Income and Pimco Dynamic Income 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.