Correlation Between Western Asset and Predex Funds
Can any of the company-specific risk be diversified away by investing in both Western Asset and Predex Funds 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 Predex Funds 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 Predex Funds, you can compare the effects of market volatilities on Western Asset and Predex Funds 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 Predex Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Predex Funds.
Diversification Opportunities for Western Asset and Predex Funds
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Western and Predex is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Adjustable and Predex Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Predex Funds 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 Predex Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Predex Funds has no effect on the direction of Western Asset i.e., Western Asset and Predex Funds go up and down completely randomly.
Pair Corralation between Western Asset and Predex Funds
If you would invest 915.00 in Western Asset Adjustable on November 27, 2024 and sell it today you would earn a total of 4.00 from holding Western Asset Adjustable or generate 0.44% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Western Asset Adjustable vs. Predex Funds
Performance |
Timeline |
Western Asset Adjustable |
Predex Funds |
Western Asset and Predex Funds Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Western Asset and Predex Funds
The main advantage of trading using opposite Western Asset and Predex Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, Predex Funds 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 Predex Funds will offset losses from the drop in Predex Funds' 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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