Correlation Between Blackrock Inflation and Western Asset
Can any of the company-specific risk be diversified away by investing in both Blackrock Inflation 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 Inflation 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 Inflation Protected and Western Asset Inflation, you can compare the effects of market volatilities on Blackrock Inflation 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 Inflation with a short position of Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackrock Inflation and Western Asset.
Diversification Opportunities for Blackrock Inflation and Western Asset
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Blackrock and Western is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Blackrock Inflation Protected and Western Asset Inflation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset Inflation and Blackrock Inflation 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 Inflation Protected 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 Inflation has no effect on the direction of Blackrock Inflation i.e., Blackrock Inflation and Western Asset go up and down completely randomly.
Pair Corralation between Blackrock Inflation and Western Asset
Assuming the 90 days horizon Blackrock Inflation is expected to generate 2.04 times less return on investment than Western Asset. But when comparing it to its historical volatility, Blackrock Inflation Protected is 1.11 times less risky than Western Asset. It trades about 0.03 of its potential returns per unit of risk. Western Asset Inflation is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 937.00 in Western Asset Inflation on September 1, 2024 and sell it today you would earn a total of 4.00 from holding Western Asset Inflation or generate 0.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Blackrock Inflation Protected vs. Western Asset Inflation
Performance |
| Timeline |
| Blackrock Inflation |
| Western Asset Inflation |
Blackrock Inflation and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Blackrock Inflation and Western Asset
The main advantage of trading using opposite Blackrock Inflation and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blackrock Inflation 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 Inflation vs. Blackrock California Municipal | Blackrock Inflation vs. Blackrock Balanced Capital | Blackrock Inflation vs. Blackrock Eurofund Class | Blackrock Inflation vs. Blackrock Funds |
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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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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