Correlation Between Frost Growth and Western Asset
Can any of the company-specific risk be diversified away by investing in both Frost Growth 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 Frost Growth and Western Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Frost Growth Equity and Western Asset Municipal, you can compare the effects of market volatilities on Frost Growth 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 Frost Growth with a short position of Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Frost Growth and Western Asset.
Diversification Opportunities for Frost Growth and Western Asset
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Frost and Western is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Frost Growth Equity 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 Frost Growth 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 Frost Growth Equity 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 Frost Growth i.e., Frost Growth and Western Asset go up and down completely randomly.
Pair Corralation between Frost Growth and Western Asset
Assuming the 90 days horizon Frost Growth Equity is expected to under-perform the Western Asset. In addition to that, Frost Growth is 7.24 times more volatile than Western Asset Municipal. It trades about -0.03 of its total potential returns per unit of risk. Western Asset Municipal is currently generating about 0.02 per unit of volatility. If you would invest 727.00 in Western Asset Municipal on September 3, 2024 and sell it today you would earn a total of 4.00 from holding Western Asset Municipal or generate 0.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Frost Growth Equity vs. Western Asset Municipal
Performance |
| Timeline |
| Frost Growth Equity |
| Western Asset Municipal |
Frost Growth and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Frost Growth and Western Asset
The main advantage of trading using opposite Frost Growth and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Frost Growth 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.| Frost Growth vs. Avantis Large Cap | Frost Growth vs. Dunham Large Cap | Frost Growth vs. Fidelity Series 1000 | Frost Growth vs. Dodge Cox Stock |
| Western Asset vs. Columbia Real Estate | Western Asset vs. Prudential Real Estate | Western Asset vs. Us Real Estate | Western Asset vs. Guggenheim Risk Managed |
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 Stocks Directory module to find actively traded stocks across global markets.
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