Correlation Between Blackrock and Western Asset
Can any of the company-specific risk be diversified away by investing in both Blackrock 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 Blackrock and Western Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Blackrock Hi Yld and Western Asset High, you can compare the effects of market volatilities on Blackrock 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 Blackrock with a short position of Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackrock and Western Asset.
Diversification Opportunities for Blackrock and Western Asset
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Blackrock and Western is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Blackrock Hi Yld and Western Asset High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset High and Blackrock 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 Blackrock Hi Yld 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 High has no effect on the direction of Blackrock i.e., Blackrock and Western Asset go up and down completely randomly.
Pair Corralation between Blackrock and Western Asset
Assuming the 90 days horizon Blackrock is expected to generate 1.07 times less return on investment than Western Asset. But when comparing it to its historical volatility, Blackrock Hi Yld is 1.07 times less risky than Western Asset. It trades about 0.21 of its potential returns per unit of risk. Western Asset High is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 660.00 in Western Asset High on September 2, 2024 and sell it today you would earn a total of 36.00 from holding Western Asset High or generate 5.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Blackrock Hi Yld vs. Western Asset High
Performance |
| Timeline |
| Blackrock Hi Yld |
| Western Asset High |
Blackrock and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Blackrock and Western Asset
The main advantage of trading using opposite Blackrock and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blackrock 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.| Blackrock vs. Forum Real Estate | Blackrock vs. Columbia Real Estate | Blackrock vs. Virtus Real Estate | Blackrock vs. Msif Real Estate |
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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 Stocks Directory module to find actively traded stocks across global markets.
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