Correlation Between Western Asset and Standard Life
Can any of the company-specific risk be diversified away by investing in both Western Asset and Standard Life 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 Standard Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Asset Emerging and Standard Life Aberdeen, you can compare the effects of market volatilities on Western Asset and Standard Life 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 Standard Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Standard Life.
Diversification Opportunities for Western Asset and Standard Life
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Western and Standard is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Emerging and Standard Life Aberdeen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Standard Life Aberdeen 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 Emerging are associated (or correlated) with Standard Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Standard Life Aberdeen has no effect on the direction of Western Asset i.e., Western Asset and Standard Life go up and down completely randomly.
Pair Corralation between Western Asset and Standard Life
Considering the 90-day investment horizon Western Asset Emerging is expected to generate 0.2 times more return on investment than Standard Life. However, Western Asset Emerging is 5.12 times less risky than Standard Life. It trades about 0.07 of its potential returns per unit of risk. Standard Life Aberdeen is currently generating about 0.01 per unit of risk. If you would invest 765.00 in Western Asset Emerging on September 3, 2024 and sell it today you would earn a total of 235.00 from holding Western Asset Emerging or generate 30.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 94.95% |
| Values | Daily Returns |
Western Asset Emerging vs. Standard Life Aberdeen
Performance |
| Timeline |
| Western Asset Emerging |
| Standard Life Aberdeen |
Western Asset and Standard Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Standard Life
The main advantage of trading using opposite Western Asset and Standard Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, Standard Life 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 Standard Life will offset losses from the drop in Standard Life's long position.| Western Asset vs. Tekla Healthcare Investors | Western Asset vs. Tekla Life Sciences | Western Asset vs. Cohen Steers Reit | Western Asset vs. XAI Octagon Floating |
| Standard Life vs. Tri Continental Closed | Standard Life vs. Adams Natural Resources | Standard Life vs. Adams Diversified Equity | Standard Life vs. Schroders PLC |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
Other Complementary Tools
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Stocks Directory Find actively traded stocks across global markets |