Correlation Between Western Asset and Atrium Mortgage
Can any of the company-specific risk be diversified away by investing in both Western Asset and Atrium Mortgage 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 Atrium Mortgage 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 Atrium Mortgage Investment, you can compare the effects of market volatilities on Western Asset and Atrium Mortgage 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 Atrium Mortgage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Atrium Mortgage.
Diversification Opportunities for Western Asset and Atrium Mortgage
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Western and Atrium is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Global and Atrium Mortgage Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atrium Mortgage Inve 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 Atrium Mortgage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atrium Mortgage Inve has no effect on the direction of Western Asset i.e., Western Asset and Atrium Mortgage go up and down completely randomly.
Pair Corralation between Western Asset and Atrium Mortgage
Considering the 90-day investment horizon Western Asset is expected to generate 4.32 times less return on investment than Atrium Mortgage. But when comparing it to its historical volatility, Western Asset Global is 4.51 times less risky than Atrium Mortgage. It trades about 0.06 of its potential returns per unit of risk. Atrium Mortgage Investment is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 680.00 in Atrium Mortgage Investment on September 4, 2024 and sell it today you would earn a total of 125.00 from holding Atrium Mortgage Investment or generate 18.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 60.73% |
| Values | Daily Returns |
Western Asset Global vs. Atrium Mortgage Investment
Performance |
| Timeline |
| Western Asset Global |
| Atrium Mortgage Inve |
Western Asset and Atrium Mortgage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Atrium Mortgage
The main advantage of trading using opposite Western Asset and Atrium Mortgage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, Atrium Mortgage 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 Atrium Mortgage will offset losses from the drop in Atrium Mortgage's long position.| Western Asset vs. Western Asset High | Western Asset vs. Western Asset Global | Western Asset vs. European Equity Closed | Western Asset vs. Doubleline Opportunistic Credit |
| Atrium Mortgage vs. Western Asset Global | Atrium Mortgage vs. Invesco Trust For | Atrium Mortgage vs. Logan Ridge Finance | Atrium Mortgage vs. Invesco Advantage MIT |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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