Correlation Between Duff and Western Asset
Can any of the company-specific risk be diversified away by investing in both Duff 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 Duff and Western Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Duff And Phelps and Western Asset Premier, you can compare the effects of market volatilities on Duff 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 Duff with a short position of Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Duff and Western Asset.
Diversification Opportunities for Duff and Western Asset
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Duff and Western is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Duff And Phelps and Western Asset Premier in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset Premier and Duff 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 Duff And Phelps 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 Premier has no effect on the direction of Duff i.e., Duff and Western Asset go up and down completely randomly.
Pair Corralation between Duff and Western Asset
Considering the 90-day investment horizon Duff And Phelps is expected to generate 6.9 times more return on investment than Western Asset. However, Duff is 6.9 times more volatile than Western Asset Premier. It trades about 0.25 of its potential returns per unit of risk. Western Asset Premier is currently generating about 0.13 per unit of risk. If you would invest 954.00 in Duff And Phelps on August 29, 2024 and sell it today you would earn a total of 293.00 from holding Duff And Phelps or generate 30.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
Duff And Phelps vs. Western Asset Premier
Performance |
| Timeline |
| Duff And Phelps |
| Western Asset Premier |
Duff and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Duff and Western Asset
The main advantage of trading using opposite Duff and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Duff 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.| Duff vs. Gabelli Global Small | Duff vs. MFS Investment Grade | Duff vs. Eaton Vance National | Duff vs. GAMCO Natural Resources |
| Western Asset vs. Angel Oak Multi Strategy | Western Asset vs. T Rowe Price | Western Asset vs. Dodge Cox Emerging | Western Asset vs. T Rowe Price |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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