Correlation Between Falcon Focus and Western Asset
Can any of the company-specific risk be diversified away by investing in both Falcon Focus 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 Falcon Focus and Western Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Falcon Focus Scv and Western Asset High, you can compare the effects of market volatilities on Falcon Focus 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 Falcon Focus with a short position of Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Falcon Focus and Western Asset.
Diversification Opportunities for Falcon Focus and Western Asset
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Falcon and Western is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Falcon Focus Scv and Western Asset High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset High and Falcon Focus 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 Falcon Focus Scv 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 High has no effect on the direction of Falcon Focus i.e., Falcon Focus and Western Asset go up and down completely randomly.
Pair Corralation between Falcon Focus and Western Asset
Assuming the 90 days horizon Falcon Focus Scv is expected to generate 2.84 times more return on investment than Western Asset. However, Falcon Focus is 2.84 times more volatile than Western Asset High. It trades about 0.12 of its potential returns per unit of risk. Western Asset High is currently generating about 0.18 per unit of risk. If you would invest 1,074 in Falcon Focus Scv on August 29, 2024 and sell it today you would earn a total of 241.00 from holding Falcon Focus Scv or generate 22.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Falcon Focus Scv vs. Western Asset High
Performance |
| Timeline |
| Falcon Focus Scv |
| Western Asset High |
Falcon Focus and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Falcon Focus and Western Asset
The main advantage of trading using opposite Falcon Focus and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Falcon Focus 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.| Falcon Focus vs. Vanguard Total Stock | Falcon Focus vs. Vanguard 500 Index | Falcon Focus vs. Vanguard Total Stock | Falcon Focus vs. Vanguard Total Stock |
| Western Asset vs. Prudential High Yield | Western Asset vs. HUMANA INC | Western Asset vs. Aquagold International | Western Asset vs. Barloworld Ltd ADR |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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