Correlation Between Ab High and Western Asset
Can any of the company-specific risk be diversified away by investing in both Ab High 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 High 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 High Income and Western Asset Intermediate, you can compare the effects of market volatilities on Ab High 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 High with a short position of Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab High and Western Asset.
Diversification Opportunities for Ab High and Western Asset
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AGDAX and Western is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Ab High Income and Western Asset Intermediate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset Interm and Ab 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 Ab High Income 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 Interm has no effect on the direction of Ab High i.e., Ab High and Western Asset go up and down completely randomly.
Pair Corralation between Ab High and Western Asset
Assuming the 90 days horizon Ab High Income is expected to generate 0.89 times more return on investment than Western Asset. However, Ab High Income is 1.13 times less risky than Western Asset. It trades about 0.19 of its potential returns per unit of risk. Western Asset Intermediate is currently generating about 0.08 per unit of risk. If you would invest 632.00 in Ab High Income on September 2, 2024 and sell it today you would earn a total of 73.00 from holding Ab High Income or generate 11.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ab High Income vs. Western Asset Intermediate
Performance |
| Timeline |
| Ab High Income |
| Western Asset Interm |
Ab High and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab High and Western Asset
The main advantage of trading using opposite Ab High and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab High 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 High vs. Technology Ultrasector Profund | Ab High vs. Science Technology Fund | Ab High vs. Janus Global Technology | Ab High vs. Blackrock Science Technology |
| Western Asset vs. Clearbridge Aggressive Growth | Western Asset vs. Clearbridge Small Cap | Western Asset vs. Qs International Equity | Western Asset vs. Clearbridge Appreciation Fund |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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