Correlation Between Western Asset and Western Asset
Can any of the company-specific risk be diversified away by investing in both Western Asset 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 Western Asset and Western Asset 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 Western Asset Mortgage, you can compare the effects of market volatilities on Western Asset 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 Western Asset with a short position of Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Western Asset.
Diversification Opportunities for Western Asset and Western Asset
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Western and Western is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Global and Western Asset Mortgage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset Mortgage 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 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 Mortgage has no effect on the direction of Western Asset i.e., Western Asset and Western Asset go up and down completely randomly.
Pair Corralation between Western Asset and Western Asset
Considering the 90-day investment horizon Western Asset Global is expected to generate 0.95 times more return on investment than Western Asset. However, Western Asset Global is 1.06 times less risky than Western Asset. It trades about 0.1 of its potential returns per unit of risk. Western Asset Mortgage is currently generating about -0.22 per unit of risk. If you would invest 1,114 in Western Asset Global on October 23, 2024 and sell it today you would earn a total of 13.00 from holding Western Asset Global or generate 1.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
Western Asset Global vs. Western Asset Mortgage
Performance |
| Timeline |
| Western Asset Global |
| Western Asset Mortgage |
Western Asset and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Western Asset
The main advantage of trading using opposite Western Asset and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset 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.| Western Asset vs. Western Asset High | Western Asset vs. Western Asset Global | Western Asset vs. European Equity Closed | Western Asset vs. Doubleline Opportunistic Credit |
| Western Asset vs. Western Asset High | Western Asset vs. Pioneer Municipal High | Western Asset vs. Doubleline Income Solutions | Western Asset vs. Doubleline Yield Opportunities |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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