Correlation Between Western Asset and Gmo Emerging
Can any of the company-specific risk be diversified away by investing in both Western Asset and Gmo Emerging 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 Western Asset and Gmo Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Asset Adjustable and Gmo Emerging Domestic, you can compare the effects of market volatilities on Western Asset and Gmo Emerging 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 Western Asset with a short position of Gmo Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Gmo Emerging.
Diversification Opportunities for Western Asset and Gmo Emerging
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Western and Gmo is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Adjustable and Gmo Emerging Domestic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gmo Emerging Domestic and Western Asset 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 Western Asset Adjustable are associated (or correlated) with Gmo Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gmo Emerging Domestic has no effect on the direction of Western Asset i.e., Western Asset and Gmo Emerging go up and down completely randomly.
Pair Corralation between Western Asset and Gmo Emerging
If you would invest 899.00 in Western Asset Adjustable on November 2, 2024 and sell it today you would earn a total of 19.00 from holding Western Asset Adjustable or generate 2.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 0.97% |
| Values | Daily Returns |
Western Asset Adjustable vs. Gmo Emerging Domestic
Performance |
| Timeline |
| Western Asset Adjustable |
| Gmo Emerging Domestic |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Western Asset and Gmo Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Gmo Emerging
The main advantage of trading using opposite Western Asset and Gmo Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, Gmo Emerging 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 Gmo Emerging will offset losses from the drop in Gmo Emerging's long position.| Western Asset vs. Clearbridge Aggressive Growth | Western Asset vs. Clearbridge Small Cap | Western Asset vs. Qs International Equity | Western Asset vs. Clearbridge Appreciation Fund |
| Gmo Emerging vs. Gmo Emerging Markets | Gmo Emerging vs. Gmo Quality Fund | Gmo Emerging vs. Hartford Schroders Emerging | Gmo Emerging vs. Fidelity Asset Manager |
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 Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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