Correlation Between Ab Core and Western Asset
Can any of the company-specific risk be diversified away by investing in both Ab Core and Western Asset 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 Ab Core and Western Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab E Opportunities and Western Asset E, you can compare the effects of market volatilities on Ab Core and Western Asset 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 Ab Core with a short position of Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Core and Western Asset.
Diversification Opportunities for Ab Core and Western Asset
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ADGAX and Western is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Ab E Opportunities and Western Asset E in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset E and Ab Core 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 Ab E Opportunities are associated (or correlated) with Western Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Asset E has no effect on the direction of Ab Core i.e., Ab Core and Western Asset go up and down completely randomly.
Pair Corralation between Ab Core and Western Asset
Assuming the 90 days horizon Ab E Opportunities is expected to generate 2.21 times more return on investment than Western Asset. However, Ab Core is 2.21 times more volatile than Western Asset E. It trades about 0.19 of its potential returns per unit of risk. Western Asset E is currently generating about 0.0 per unit of risk. If you would invest 2,512 in Ab E Opportunities on August 30, 2024 and sell it today you would earn a total of 94.00 from holding Ab E Opportunities or generate 3.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ab E Opportunities vs. Western Asset E
Performance |
| Timeline |
| Ab E Opportunities |
| Western Asset E |
Ab Core and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Core and Western Asset
The main advantage of trading using opposite Ab Core and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Core position performs unexpectedly, Western Asset 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 Western Asset will offset losses from the drop in Western Asset's long position.| Ab Core vs. Multimanager Lifestyle Aggressive | Ab Core vs. Needham Aggressive Growth | Ab Core vs. Siit High Yield | Ab Core vs. California High Yield Municipal |
| Western Asset vs. Tiaa Cref Small Cap Blend | Western Asset vs. Massmutual Premier Diversified | Western Asset vs. Small Cap Stock | Western Asset vs. American Century Diversified |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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