Correlation Between Western Asset and Brandywineglobal
Can any of the company-specific risk be diversified away by investing in both Western Asset and Brandywineglobal 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 Brandywineglobal 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 Brandywineglobal Globalome Opportunities, you can compare the effects of market volatilities on Western Asset and Brandywineglobal 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 Brandywineglobal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Brandywineglobal.
Diversification Opportunities for Western Asset and Brandywineglobal
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Western and Brandywineglobal is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Global and Brandywineglobal Globalome Opp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brandywineglobal Glo 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 Brandywineglobal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brandywineglobal Glo has no effect on the direction of Western Asset i.e., Western Asset and Brandywineglobal go up and down completely randomly.
Pair Corralation between Western Asset and Brandywineglobal
Considering the 90-day investment horizon Western Asset Global is expected to under-perform the Brandywineglobal. But the etf apears to be less risky and, when comparing its historical volatility, Western Asset Global is 1.53 times less risky than Brandywineglobal. The etf trades about -0.14 of its potential returns per unit of risk. The Brandywineglobal Globalome Opportunities is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 831.00 in Brandywineglobal Globalome Opportunities on August 31, 2024 and sell it today you would earn a total of 13.00 from holding Brandywineglobal Globalome Opportunities or generate 1.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Asset Global vs. Brandywineglobal Globalome Opp
Performance |
| Timeline |
| Western Asset Global |
| Brandywineglobal Glo |
Western Asset and Brandywineglobal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Brandywineglobal
The main advantage of trading using opposite Western Asset and Brandywineglobal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, Brandywineglobal 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 Brandywineglobal will offset losses from the drop in Brandywineglobal'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 |
| Brandywineglobal vs. MFS Investment Grade | Brandywineglobal vs. Eaton Vance Municipal | Brandywineglobal vs. DTF Tax Free | Brandywineglobal vs. HUMANA INC |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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