Correlation Between Western Asset and Dgi Investment
Can any of the company-specific risk be diversified away by investing in both Western Asset and Dgi Investment 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 Dgi Investment 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 Dgi Investment Trust, you can compare the effects of market volatilities on Western Asset and Dgi Investment 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 Dgi Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Dgi Investment.
Diversification Opportunities for Western Asset and Dgi Investment
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Western and Dgi is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Adjustable and Dgi Investment Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dgi Investment Trust 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 Dgi Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dgi Investment Trust has no effect on the direction of Western Asset i.e., Western Asset and Dgi Investment go up and down completely randomly.
Pair Corralation between Western Asset and Dgi Investment
Assuming the 90 days horizon Western Asset is expected to generate 1.52 times less return on investment than Dgi Investment. But when comparing it to its historical volatility, Western Asset Adjustable is 5.68 times less risky than Dgi Investment. It trades about 0.25 of its potential returns per unit of risk. Dgi Investment Trust is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 995.00 in Dgi Investment Trust on November 26, 2024 and sell it today you would earn a total of 181.00 from holding Dgi Investment Trust or generate 18.19% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 99.8% |
Values | Daily Returns |
Western Asset Adjustable vs. Dgi Investment Trust
Performance |
Timeline |
Western Asset Adjustable |
Dgi Investment Trust |
Western Asset and Dgi Investment Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Western Asset and Dgi Investment
The main advantage of trading using opposite Western Asset and Dgi Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, Dgi Investment 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 Dgi Investment will offset losses from the drop in Dgi Investment's long position.Western Asset vs. Western Asset Adjustable | ||
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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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