Correlation Between Ab E and Western Asset
Can any of the company-specific risk be diversified away by investing in both Ab E 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 E 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 Inflation, you can compare the effects of market volatilities on Ab E 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 E with a short position of Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab E and Western Asset.
Diversification Opportunities for Ab E and Western Asset
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ADGAX and Western is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Ab E Opportunities and Western Asset Inflation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset Inflation and Ab E 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 Inflation has no effect on the direction of Ab E i.e., Ab E and Western Asset go up and down completely randomly.
Pair Corralation between Ab E and Western Asset
Assuming the 90 days horizon Ab E Opportunities is expected to generate 2.93 times more return on investment than Western Asset. However, Ab E is 2.93 times more volatile than Western Asset Inflation. It trades about 0.19 of its potential returns per unit of risk. Western Asset Inflation is currently generating about -0.01 per unit of risk. If you would invest 2,510 in Ab E Opportunities on August 31, 2024 and sell it today you would earn a total of 96.00 from holding Ab E Opportunities or generate 3.82% 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 Inflation
Performance |
| Timeline |
| Ab E Opportunities |
| Western Asset Inflation |
Ab E and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab E and Western Asset
The main advantage of trading using opposite Ab E and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab E 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 E vs. Principal Lifetime Hybrid | Ab E vs. Blackrock Sm Cap | Ab E vs. Harbor Diversified International | Ab E vs. Pgim Jennison Diversified |
| Western Asset vs. Short Precious Metals | Western Asset vs. Gamco Global Gold | Western Asset vs. Gold And Precious | Western Asset vs. Precious Metals And |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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