Correlation Between Western Asset and Franklin Adjustable
Can any of the company-specific risk be diversified away by investing in both Western Asset and Franklin Adjustable 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 Franklin Adjustable 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 Franklin Adjustable Government, you can compare the effects of market volatilities on Western Asset and Franklin Adjustable 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 Franklin Adjustable. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Franklin Adjustable.
Diversification Opportunities for Western Asset and Franklin Adjustable
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Western and Franklin is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Adjustable and Franklin Adjustable Government in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Adjustable 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 Franklin Adjustable. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Adjustable has no effect on the direction of Western Asset i.e., Western Asset and Franklin Adjustable go up and down completely randomly.
Pair Corralation between Western Asset and Franklin Adjustable
If you would invest 917.00 in Western Asset Adjustable on November 6, 2024 and sell it today you would earn a total of 1.00 from holding Western Asset Adjustable or generate 0.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
Western Asset Adjustable vs. Franklin Adjustable Government
Performance |
| Timeline |
| Western Asset Adjustable |
| Franklin Adjustable |
Western Asset and Franklin Adjustable Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Franklin Adjustable
The main advantage of trading using opposite Western Asset and Franklin Adjustable positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, Franklin Adjustable 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 Franklin Adjustable will offset losses from the drop in Franklin Adjustable's long position.| Western Asset vs. Short Term Fund A | Western Asset vs. Western Asset Mortgage | Western Asset vs. Western Asset Intermediate Term | Western Asset vs. T Rowe Price |
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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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