Correlation Between Western Asset and Mexico Equity
Can any of the company-specific risk be diversified away by investing in both Western Asset and Mexico Equity 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 Western Asset and Mexico Equity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Asset Global and Mexico Equity And, you can compare the effects of market volatilities on Western Asset and Mexico Equity 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 Western Asset with a short position of Mexico Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Mexico Equity.
Diversification Opportunities for Western Asset and Mexico Equity
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Western and Mexico is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Global and Mexico Equity And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mexico Equity And and Western Asset 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 Western Asset Global are associated (or correlated) with Mexico Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mexico Equity And has no effect on the direction of Western Asset i.e., Western Asset and Mexico Equity go up and down completely randomly.
Pair Corralation between Western Asset and Mexico Equity
Considering the 90-day investment horizon Western Asset is expected to generate 1.71 times less return on investment than Mexico Equity. But when comparing it to its historical volatility, Western Asset Global is 1.83 times less risky than Mexico Equity. It trades about 0.24 of its potential returns per unit of risk. Mexico Equity And is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 803.00 in Mexico Equity And on November 1, 2024 and sell it today you would earn a total of 48.00 from holding Mexico Equity And or generate 5.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Western Asset Global vs. Mexico Equity And
Performance |
| Timeline |
| Western Asset Global |
| Mexico Equity And |
Western Asset and Mexico Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Mexico Equity
The main advantage of trading using opposite Western Asset and Mexico Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, Mexico Equity 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 Mexico Equity will offset losses from the drop in Mexico Equity's long position.| Western Asset vs. Western Asset High | Western Asset vs. BNY Mellon High | Western Asset vs. Allspring Income Opportunities | Western Asset vs. Allianzgi Convertible Income |
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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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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