Correlation Between Cmg Ultra and Western Asset
Can any of the company-specific risk be diversified away by investing in both Cmg Ultra 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 Cmg Ultra and Western Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cmg Ultra Short and Western Asset Municipal, you can compare the effects of market volatilities on Cmg Ultra 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 Cmg Ultra with a short position of Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cmg Ultra and Western Asset.
Diversification Opportunities for Cmg Ultra and Western Asset
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Cmg and Western is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Cmg Ultra Short and Western Asset Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset Municipal and Cmg Ultra 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 Cmg Ultra Short 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 Municipal has no effect on the direction of Cmg Ultra i.e., Cmg Ultra and Western Asset go up and down completely randomly.
Pair Corralation between Cmg Ultra and Western Asset
Assuming the 90 days horizon Cmg Ultra is expected to generate 9.02 times less return on investment than Western Asset. But when comparing it to its historical volatility, Cmg Ultra Short is 8.52 times less risky than Western Asset. It trades about 0.22 of its potential returns per unit of risk. Western Asset Municipal is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 725.00 in Western Asset Municipal on September 13, 2024 and sell it today you would earn a total of 7.00 from holding Western Asset Municipal or generate 0.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cmg Ultra Short vs. Western Asset Municipal
Performance |
| Timeline |
| Cmg Ultra Short |
| Western Asset Municipal |
Cmg Ultra and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cmg Ultra and Western Asset
The main advantage of trading using opposite Cmg Ultra and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cmg Ultra 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.| Cmg Ultra vs. Mfs Technology Fund | Cmg Ultra vs. Towpath Technology | Cmg Ultra vs. Science Technology Fund | Cmg Ultra vs. Red Oak Technology |
| Western Asset vs. Vanguard Total Stock | Western Asset vs. Vanguard 500 Index | Western Asset vs. Vanguard Total Stock | Western Asset vs. Vanguard Total Stock |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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