Correlation Between Fuller Thaler and Western Asset
Can any of the company-specific risk be diversified away by investing in both Fuller Thaler 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 Fuller Thaler and Western Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fuller Thaler Behavioral and Western Asset High, you can compare the effects of market volatilities on Fuller Thaler 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 Fuller Thaler with a short position of Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fuller Thaler and Western Asset.
Diversification Opportunities for Fuller Thaler and Western Asset
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fuller and Western is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Fuller Thaler Behavioral 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 Fuller Thaler 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 Fuller Thaler Behavioral 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 Fuller Thaler i.e., Fuller Thaler and Western Asset go up and down completely randomly.
Pair Corralation between Fuller Thaler and Western Asset
Assuming the 90 days horizon Fuller Thaler Behavioral is expected to generate 4.58 times more return on investment than Western Asset. However, Fuller Thaler is 4.58 times more volatile than Western Asset High. It trades about 0.13 of its potential returns per unit of risk. Western Asset High is currently generating about 0.22 per unit of risk. If you would invest 4,629 in Fuller Thaler Behavioral on September 3, 2024 and sell it today you would earn a total of 775.00 from holding Fuller Thaler Behavioral or generate 16.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fuller Thaler Behavioral vs. Western Asset High
Performance |
| Timeline |
| Fuller Thaler Behavioral |
| Western Asset High |
Fuller Thaler and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fuller Thaler and Western Asset
The main advantage of trading using opposite Fuller Thaler and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fuller Thaler 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.| Fuller Thaler vs. Commonwealth Global Fund | Fuller Thaler vs. Alliancebernstein Global High | Fuller Thaler vs. Barings Global Floating | Fuller Thaler vs. Doubleline Global Bond |
| Western Asset vs. Oklahoma College Savings | Western Asset vs. Massmutual Select Diversified | Western Asset vs. Jpmorgan Emerging Markets | Western Asset vs. Locorr Market Trend |
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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