Correlation Between Baird E and Western Asset
Can any of the company-specific risk be diversified away by investing in both Baird E 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 Baird E and Western Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Baird E Plus and Western Asset E, you can compare the effects of market volatilities on Baird E 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 Baird E with a short position of Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baird E and Western Asset.
Diversification Opportunities for Baird E and Western Asset
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Baird and WESTERN is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Baird E Plus and Western Asset E in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset E and Baird E 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 Baird E Plus 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 E has no effect on the direction of Baird E i.e., Baird E and Western Asset go up and down completely randomly.
Pair Corralation between Baird E and Western Asset
Assuming the 90 days horizon Baird E Plus is expected to generate 0.75 times more return on investment than Western Asset. However, Baird E Plus is 1.33 times less risky than Western Asset. It trades about 0.05 of its potential returns per unit of risk. Western Asset E is currently generating about 0.02 per unit of risk. If you would invest 932.00 in Baird E Plus on August 30, 2024 and sell it today you would earn a total of 86.00 from holding Baird E Plus or generate 9.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baird E Plus vs. Western Asset E
Performance |
| Timeline |
| Baird E Plus |
| Western Asset E |
Baird E and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baird E and Western Asset
The main advantage of trading using opposite Baird E and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baird E 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.| Baird E vs. Pimco Income Fund | Baird E vs. HUMANA INC | Baird E vs. Aquagold International | Baird E vs. Barloworld Ltd ADR |
| Western Asset vs. Doubleline Total Return | Western Asset vs. Metropolitan West Total | Western Asset vs. Thompson Bond Fund | Western Asset vs. Tcw E Fixed |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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